Preamble

The House met at half-past Two o'clock

PRAYERS

[MR. SPEAKER in the Chair]

ROYAL ASSENT

Mr. Speaker: I have to notify the House, in accordance with the Royal Assent Act 1967, that the Queen has signified Her Royal Assent to the following Acts:

1. Gairloch Harbour Order Confirmation Act 1987
2. Shetland Islands Council (Ham Voe, Foula) Order Confirmation Act 1987

PRIVATE BUSINESS

ADVOCATES' WIDOWS' AND ORPHANS' FUND ORDER CONFIRMATION

Mr. Secretary Rifkind presented a Bill to confirm a Provisional Order under section 8 of the Private Legislation Procedure (Scotland) Act 1936, relating to the Advocates' Widows' and Orphans' Fund: And the same was read the First time; and ordered to be read a Second time on Tuesday 27 January and to be printed. [Bill 45]

Oral Answers to Questions — WALES

Opencast Mining

Mr. Coleman: asked the Secretary of State for Wales what recent discussions he has had with the chairman of British Coal about opencast mining in south Wales.

Mr. Livsey: asked the Secretary of State for Wales what recent discussions he has had with the chairman of British Coal about opencast mining in the Ystradgynlais area in Powys; and if he will make a statement.

The Secretary of State for Wales (Mr. Nicholas Edwards): I have not recently met the chairman of British Coal to discuss opencast mining.

Mr. Coleman: It was recently reported that the Secretary of State had overruled his inspector concerning a planning application for opencast mining in his own constituency. Will the Secretary of State state precisely his reasons for that? Will he issue a circular containing them, so that local authorities dealing with planning applications for opencast mining may have them for their guidance when deciding upon future applications, whether by British Coal or by private persons?

Mr. Edwards: The reasons were set out in the decision letter. Basically, we had to weigh up the importance of

opencast mining to the economy and to the Welsh coal industry—it makes a significant contribution—and the effect of this scheme, especially on the environment, tourism and the local economy. Each case must be decided on its merits.

Mr. Livsey: Will the Secretary of State say whether he is opposed to opencast mining alongside village communities? In my constituency at Upper and Lower Cwmtwrch there are proposals for opencast mining at the Brynhenllys site. Will he reject those proposals?

Mr. Edwards: British Coal has appealed against the refusal of Powys county council to grant planning permission at the site named by the hon. Gentleman. I cannot comment on the merits of the proposal because it is clearly one that I shall have to consider as Secretary of State. The hon. Gentleman knows that I cannot discuss the merits of an individual application.

Mr. Rowlands: Is the Secretary of State aware of the strength of feeling about schemes that could continue for years, disfigure the environment and cause considerable nuisance and difficulty for many residents in the borough of Merthyr Tydfil? Will he at least consider that these decisions and proposals can have a long-term effect in terms of attracting industry to and commercial development in the borough? I hope that the right hon. Gentleman takes those aspects into account.

Mr. Edwards: All those matters and their effect on local communities must be considered, but we must also recognise that there is a need for the range of special and high-quality coals which the industry produces. They provide employment opportunities and contribute to the financial profitability of British Coal. All those matters must be considered on an individual-case basis.

Mr. Rogers: Will the Secretary of State not heed the question put to him by my hon. Friend the Member for Neath (Mr. Coleman) and apply to applications in the valley communities the same criteria as he is applying to the application in his constituency? Does he not think that it is a shame that he made that decision?

Mr. Edwards: It is not a shame that I made that decision. I happen to think that it was right. This is the only one of the cases currently under consideration that has come before me at present. I shall give exactly the same detailed consideration to all these cases.

Mr. Roy Hughes: Does the Secretary of State realise that Labour Members appreciate that there are economic arguments for and against opencast mining and, likewise, important environmental considerations? We are trying to elicit Welsh Office policy. Is it that opencast mining is permissible in any part of Wales other than Pembroke?

Mr. Edwards: The hon. Gentleman started by very fairly weighing up the balance of the issues that must be considered in each case. Only one of the decisions has come before me in the recent past. A number of other cases are being considered by the Department or are likely to come before it in the near future, and we shall consider each on its merits.

"A Good Old Age"

Mr. D. E. Thomas: asked the Secretary of State for Wales what progress his Department has made in coordinating services for the elderly following his consultation document "A Good Old Age" published in September 1985; and if he will make a statement.

Mr. Geraint Howells: asked the Secretary of State for Wales if he is satisfied with the present arrangements for looking after the elderly in Wales; and if he will make a statement.

The Parliamentary Under-Secretary of State for Wales (Mr. Mark Robinson): My right hon. Friend announced last Thursday that he has issued a circular inviting local authorities, health authorities and others to submit bids for a grant programme over an eight-year period which will encourage new developments in the care of elderly people in Wales on the lines described in "A Good Old Age".

Mr. Thomas: Will the hon. Gentleman spell out the effective level of co-operation between local and health authorities in Wales during the present cold spell? How many avoidable deaths occurred during this period because of a lack of effective community care?

Mr. Robinson: We have been monitoring the position closely during the cold weather and have no reason to believe that the emergency arrangements of health and local authorities are not working well. We have made additional funds available for voluntary organisations to deal with the short-term crisis for homeless people, and made £25,000 available to Shelter Wales.

Mr. Geraint Howells: Does the hon. Gentleman have other proposals to help the elderly if the weather becomes colder? Does he have any plans to increase the £5 weekly grant to £7 or £10 to help the elderly in the present situation?

Mr. Robinson: That is a matter not for me but for my right hon. Friend the Secretary of State for Social Services.

Mr. Gwilym Jones: Does my hon. Friend agree that there has already been a significant contribution to "A Good Old Age" by the Government's quadrupling of spending on heating, including the severe weather payments scheme? Is this record not far superior to that of the Lib-Lab Government?

Mr. Robinson: I entirely agree with my hon. Friend. In response to "A Good Old Age" we intend to make £1 million available in the current financial year, £2 million in 1988–89 and £4 million in 1989–90, and to extend the scheme for a further eight years. My hon. Friend may recall that my right hon. Friend the Secretary of State initially announced in the Welsh Grand Committee a funding programme for three years of £5 million. Our programme over the first three years now amounts to £7 million.

Mr. Ron Davies: Does the Minister accept that a prerequisite of a reasonable level of service for the elderly is adequate heating? Does he also accept that last week clearly demonstrated that the Government's legislative provision was inadequate? If it had been adequate, there would have been no need for the Government to override their own procedures. What criteria will have to be fulfilled in terms of temperature and weather conditions generally to enable the existing legislative criteria to be set aside?

Mr. Robinson: I am again asked questions that are the responsibility of my right hon. Friend the Secretary of State for Social Services. A supplementary pensioner over 65 is receiving £8 a week for heating costs, amounting to £400 a year. For a pensioner over 85 the amount rises to £11 a week, or nearly £600 a year per householder. In addition, there is a £5 heating supplement. Taken together, this package is far more comprehensive than anything Labour had when in office.

Sir Raymond Gower: Will my hon. Friend take a special look at the circumstances of those, particularly retirement pensioners, who, in addition to their retirement pension, enjoy some small industrial pension or tiny secondary income which deprives them not only of supplementary benefit but of everything that goes with it—for example, rebates and heating allowances?

Mr. Robinson: I take note of what my hon. Friend has said. However, that again is a matter for my right hon. Friend the Secretary of State for Social Services. I am sure that he. too, will take note of my hon. Friend's point.

Dr. Roger Thomas: During his busy week, will the Minister find time to read an Adjournment debate speech in which the hon. Member for Leicester, East (Mr. Bruinvels) catalogued the defects that are already showing up in legislation that was passed two years ago with regard to the registration of homes for the elderly? Does the Minister agree with his hon. Friend's conclusion that that legislation is now producing cruelty for the elderly and is fleecing them of their money?

Mr. Robinson: The hon. Gentleman raises matters that are not my responsibility. However, in the matter of residential homes for the elderly, there is a system of regulation which is controlled by the social services departments which register and inspect all private and voluntary homes under the Registered Homes Act 1984.

Mr. Best: The House will welcome my hon. Friend's statement that funding will be made available over the eight-year period. Has he any schemes to assist organisations to help elderly people to keep their houses in good repair?

Mr. Robinson: I thank my hon. Friend for his comments about that important initiative. On the matter of schemes to help improve the houses of the elderly that are in disrepair, we are putting up to £200,000 into home improvement agency services through organisations such as Care and Repair Ltd. in each of the next three years to help elderly people improve their homes so that they may live in comfort.

Mr. Barry Jones: Low income is the chief factor in the pensioners' fight against the cold, and the 40p award aroused contempt throughout Wales. Does the Minister understand that one way of improving services for the elderly is to ensure that there is less violence and intimidation on our housing estates? Why does the Minister not begin a much wider campaign for better safety locks and improved estate lighting? Does he agree that having more policemen on the beat would eliminate muggings of elderly people?

Mr. Robinson: The hon. Gentleman is treading on rather soft ground, because it was a Labour Government who failed to pay the Christmas bonus to pensioners in two of the last five years that they were in office. As the


hon. Gentleman is aware, we have already launched our priority estates programme in Wales. It is having considerable success and has recently been expanded.

Secondary Schools (Expenditure)

Mr. Knox: asked the Secretary of State for Wales how much was spent per pupil in secondary schools in Wales in the most recent year for which figures are available; and what was the comparable figure for 1978–79, at constant figures.

The Parliamentary Under-Secretary of State for Wales (Mr. Wyn Roberts): In 1985–86 the amount spent per pupil in secondary schools in Wales was £1,158. The equivalent figure for 1978–79 was £1,002.

Mr. Knox: Does not my hon. Friend's answer make nonsense of Opposition claims of cuts in education expenditure?

Mr. Roberts: My hon. Friend is absolutely right. In real terms expenditure on education remains broadly constant, while pupil numbers have decreased. Local authority revenue spending on education in Wales, excluding school meals and milk, was slightly higher in 1985–86 than in 1979–80, despite a significant decline in pupil numbers.

Dr. Marek: Is the Minister aware that expenditure on education increased in 1979–80 as a result of decisions taken by the last Labour Administration, and that in the years between 1980–81 and 1984–85 it went down from £694·3 million to £689·3 million at 1984–85 prices? Those figures relate to local authority net expenditure. If the figure has now increased again, does the Minister agree that that is the result of a last-ditch cynical manoeuvre to try to rescue his extremist and do-not-care party from being annihilated in Wales in the next general election?

Mr. Roberts: I do not have the figures that the hon. Gentleman quoted. However, I do have figures for spending on primary and secondary pupils in cash and in cost terms from 1976–77 to 1985–86. To put it briefly, those figures are on the up all the way.

Mr. Raffan: Will my hon. Friend agree to press upon Clwyd county council in particular that it would have far more to spend per secondary school pupil if only it could muster the political will to tackle the county's massive number of surplus places? If those surplus places remain untackled, they will amount to 23,000 by 1989.

Mr. Roberts: My hon. Friend is absolutely right. There is a problem with surplus places in Wales, including Clwyd. We must take hard decisions to eliminate them.

Mr. Barry Jones: The Minister is complacent and self-congratulatory. May I remind him of the chilling and rather disturbing reports by Her Majesty's Inspectorate in Wales over the past five years? The reports show shabby, dilapidated and damp schools. The schools depend upon parent-teacher associations to raise vital money, the equipment is defective and the texbooks dog-eared. Surely the Minister has reason to believe that the inspectorate is pointing to the real situation in Wales. Why has he boosted funds to public schools by over 1,000 per cent., when our state sector goes short?

Mr. Roberts: We are making substantial capital resources available to local authorities in Wales. Since the introduction of the new capital control system in 1981–82,

capital allocations have increased substantially. By next year that increase will be 56 per cent. We can make the capital available to local authorities, but we cannot force them to spend it on schools.

Mid Glamorgan Area Health Authority

Mr. John: asked the Secretary of State for Wales what additional revenue income he proposes to allocate to Mid Glamorgan area health authority in the forthcoming year.

Mr. Mark Robinson: In 1987–88 Mid Glamorgan district health authority will have a revenue allocation of nearly £125 million, an increase of just under 6 per cent. over the previous year. In addition, it will be able to retain all the revenue income that the authority itself generates.

Mr. John: The Minister will know that at Rhiwfelin hospital yesterday there was a celebration for the 100th birthday of one of the patients. Will he accept that no one who attended that celebration could fail to be impressed by the dedication of the staff to the patients and the homely atmosphere that has been created? Does the Minister agree that some of the elderly cannot be accommodated within the ideas of catering for old age within the community and that there needs to be a continuation of hospital places to accommodate such people? Does he think that the Welsh Office should have another look at the revenue implications in order I o keep hospitals such as Rhiwfelin open so that people may be accommodated with dignity in their great old age?

Mr. Robinson: I should like to associate myself with the hon. Gentleman's comments about the dedicated work of the staff at Rhiwfelin hospital. I understand that the authority is currently engaged in a consultation exercise as to the future of the hospital. Should local agreement not be reached on the matter, it will be referred to my right hon. Friend the Secretary of State for decision. Some of the points made by the hon. Member for Pontypridd (Mr. John) are precisely the issues my right hon. Friend will take into account when reaching his decision.

Mrs. Clwyd: Is the Minister satisfied that sufficient resources are being devoted to the care of the mentally ill and the mentally handicapped, given the highly critical report by the Hospital Advisory Service, which said last week that mental illness care in one particular Welsh county was in danger of collapse? Given the history of scandals in Wales concerning care of the mentally ill and mentally handicapped, will the Minister give us assurances that sufficient resources are being given to the area health authorities for such care?

Mr. Robinson: The report to which the hon. Lady refers goes into issues that are way beyond the details of Welsh Office funding. It concerns the role of the local health authority and social services department. However, the cash limit for 1987–88 for the All-Wales Mental Handicap Initiative, subject to parliamentary approval, is likely to be in the region of £10 million to develop new services under the mental handicap strategy.

Mr. Roy Hughes: Is it not apparent to the Minister that, with the marked decline in Health Service facilities and with mass unemployment, a poor environment and all the social factors stemming from those issues, Mid Glamorgan requires not another hospital closure but more adequate funding of its Health Service facilities?

Mr. Robinson: I do not understand how the hon. Gentleman can describe a 33 per cent. growth in recurrent revenue resources to district health authorities between 1978–79 and the present time as a cut in available resources. I also cannot understand how he can describe as a decline a hospital building programme that amounts to almost £490 million at today's prices since 1979. To my way of thinking that is a considerable increase in the hospital and care services available in the Principality.

Working Population (Intermediate Areas)

Mr. Gareth Wardell: asked the Secretary of State for Wales what is his current estimate of the percentage of the working population of Wales residing in intermediate areas; and what was the corresponding figure for 1979.

Mr. Nicholas Edwards: Fifty-one per cent. of the economically active population of Wales live in intermediate areas. The corresponding figure for early 1979 was approximately 13 per cent.

Mr. Wardell: While I accept from the Secretary of State's figures that there has been an expansion in the population of Wales living in intermediate areas, does he agree that at the same time he has drastically reduced from 90 to 38 per cent. the proportion of the working population who live in assisted areas receiving regional development grants? Is he really proud of the fact that from April this year a moratorium of two months will be imposed on the payment of regional development grants? The Government are once again increasing the divide between north and south, with Wales firmly in the north.

Mr. Edwards: On the moratorium, we have been faced with a considerable bulge in the number of applications. There was an overlap on the two schemes and there has been a four-month moratorium under the old scheme and there will be a two-month moratorium under the new scheme. In each of the years 1984, 1985, and 1986 the estimated number of new jobs created following acceptance of regional selective assistance and regional development grants in Wales was well over 12,000. In 1986 the figure was more than 16,000. That compares with the 1979 figure of under 10,000. It is clear that the Government's regional policy is creating more new jobs than were created by that followed by the previous Labour Government.

Sir Anthony Meyer: Does my right hon. Friend accept that the insistence of the Treasury on thinking of things solely in 12-month periods is positively unhelpful to his tremendous efforts to create a consistent, long-term development policy for the Principality?

Mr. Edwards: We have had a very considerable bulge in applications. We have been dealing with record figures for jobs created by our regional policy. During 1986 no fewer than 135 offers of assistance totalling more than £37·5 million were expected, promising to create more than 5,400 new jobs and to safeguard 4,000 existing jobs in Wales. These figures show that within the flexibility that we have—and we have a three-year PESC period—we are able to pursue a very effective regional policy, not least in the area of Wales represented by my hon. Friend the Member for Clwyd, North-West (Sir A. Meyer).

Mr. Wigley: Is the Secretary of State aware that the whole of my constituency is an intermediate area and that

the Pwllheli employment exchange shows for this month an unemployment rate of 22·2 per cent. compared with an average of 19·1 per cent. for the full development areas throughout Great Britain? Is it not high time that the Secretary of State either looked again at the designation of intermediate areas or came forward with a much more effective regional policy?

Mr. Edwards: Any regional policy must have a degree of consistency. We have had a major review and we should not change the boundaries of areas every few months or every year or so. The hon. Gentleman must recognise that the scope for giving selective assistance in the intermediate areas is considerable. When significant projects have been brought forward, it has nearly always been possible to put together a financial package to enable us to secure them. As the hon. Gentleman knows, his constituency is faced with problems of location and infrastructure. Possibly the greatest single contribution that we are making in the hon. Gentleman's part of Wales is the rapid progress towards completing the A55 dualling.

Sir Raymond Gower: Can my right hon. Friend assure the House that the package which the Welsh Office, the Welsh Development Agency and Winvest are able to offer industrialists who are considering moving into Wales has proved adequate since the boundaries for grants were last altered?

Mr. Edwards: The fact that we have attracted about 20 per cent. of all inward investment into the United Kingdom, when we have about 7 per cent. of the population, shows that Wales is getting a very fair share. One threat that is hanging over that inward investment is the Labour party's promise to reintroduce exchange controls. I cannot think of a more devastating blow to job and investment prospects for Wales, as it would immediately halt inward investment and have a devastating impact on decisions made by overseas companies which have major plants here and are planning expansion.

Mr. Anderson: When the Secretary of State talks about fair shares for Wales and the effectiveness of regional policy, would he care to read today's Financial Times supplement on regional policy, which speaks of the collapse of such a policy under this Government and says, among other things, that the increase in unemployment in Wales while the right hon. Gentleman has been in office is double that in Northern Ireland? Is that the legacy that the right hon. Gentleman will proudly leave Wales?

Mr. Edwards: Unemployment in Wales has fallen in eight of the past nine months. The number of people unemployed in December was about 10,500 down on the peak of March last year and we have an all-time record allocation of Government factories at only just under 2·5 million sq ft. That shows the complete nonsense of describing our policies as a failure.

Labour Statistics

Mr. Barry: Jones asked the Secretary of State for Wales what were the unemployment totals and percentages for (a) Wales and (b) Clwyd at the latest date for which such figures are available and for May 1979; and if he will give the percentage increase.

Mr. Nicholas Edwards: On 11 December 1986 the total numbers of unemployed claimants in Wales and Clwyd


were 173,546 and 23,729 respectively. The number of unemployed claimants in Wales, seasonally adjusted, was 165,900, or 13·4 per cent. of the working population. In May 1979 it was 73,100, an increase over the period of 127 per cent.

Mr. Jones: Those are deeply disturbing figures, especially when seen against the background of the recently revealed loss of some 113,000 manufacturing jobs since 1979. One calculation is that, at the current rate of decrease, it will take until 1994 simply to reduce the figure to 100,000. Has the right hon. Gentleman realised the serious consequences that there would be for north-east Wales if the predatory and greedy BTR takeover bid for Pilkington was successful? I remind the right hon. Gentleman that my constituents at Queensferry have signed a petition against the takeover. Will he urge his Cabinet colleagues to reconsider the weak decision taken by the Secretary of State for Trade and Industry not to refer the hid to the Monopolies and Mergers Commission? Does the right hon. Gentleman agree that the public interest demands an about-turn, especially as junior Ministers do not support their Secretary of State? To us in Wales it appears that the City is increasingly corrupt. We want action on Pilkington.

Mr. Edwards: On the ground of competition policy, bearing in mind the consistent application of that policy, and with the recommendation of the Director General of Fair Trading in front of him, my right hon. Friend the Secretary of State for Trade and Industry made the absolutely correct decision. I am equally sure that investors in the company will want to take very careful account of Pilkington's impressive record in research and development and on maintaining regional operations in terms of headquarters and research and development. I am sure that they will also want to consider the company's successful record. I hope that investors will bear all those factors carefully in mind when they decide the long-term future of the company.

Mr. Terlezki: I think that we ought to welcome the reduction in unemployment in Wales, although it is marginal. My right hon. Friend travels far and wide to introduce industries to Wales and we have an excellent labour force, but if the Opposition continue with their scaremongering, industries from all over the world which intend to come to Wales, and which we need, will not come.

Mr. Speaker: What is the question?

Mr. Edwards: There is no doubt that hon. Members on both sides of the House should welcome the steady fall in unemployment that has taken place over the past nine months in Wales, and which as continued to be evident in the figures for the most recent available month. I repeat that the policies that are being advanced by the Opposition represent a serious threat. The hon. Member for Alyn and Deeside (Mr. Jones) has introduced his own policy or, apparently, a whole range of competing development agencies in almost every hamlet of the Principality. That policy was promptly ridiculed and dismissed by almost all his colleagues, including a former Secretary of State for Wales.

Mr. Foot: As the right hon. Gentleman is so proud of his regional policy, will he tell us precisely how much the

Treasury has saved on that policy since 1979? All those millions could have been better spent in the worst-hit areas of Wales.

Mr. Edwards: As I have already pointed out to the right hon. Gentleman, the policies that we are pursuing have produced a rising number of new jobs, created as a result of that assistance. There has been a record amount of factory allocations and, as the right hon. Gentleman is aware, we have allocated substantial new resources to the valleys initiative and the proposed garden festival that will be held in his constituency.

Sir Anthony Meyer: Is my right hon. Friend aware that there will be a general welcome for the clear lead that he gave just now in his answer about the Government's belief that the independence of Pilkington is vital, not only for the retention of existing jobs, but for the provision of future jobs in north Wales?

Mr. Edwards: There are two quite separate matters involved. There is the question of competition policy, and whether to send the matter to the Monopolies and Mergers Commission. Indeed, my right hon. Friend the Secretary of State for Trade and Industry, when making his announcement, pointed out that would not necessarily have led to any different decision.
The other question concerned the merits of the bid that now has to be considered by the investors. I believe that Pilkington has an outstanding record based on research and development and that the long-term record and the company's prospects should be high in the minds of those who have to take the decision.

Mr. Geraint Howells: I am sure that the Secretary of State is aware that the unemployment percentage in the Cardigan area is one of the highest in Wales and stands at 26 per cent., as it has done for the past 10 years. I wonder what plans the Secretary of State has in mind to try to resolve this problem.

Mr. Edwards: I very much welcome the active initiatives that are being taken particularly in the Teifi valley by the enterprise agencies. I believe that the activities of those organisations will make an increasingly valuable contribution in some of the more difficult rural areas where it is not easy, as the hon. Gentleman well knows, to create new jobs. Indeed, the hon. Gentleman pointed out that this sutuation of high unemployment has continued in the area for a long time, including during the period of the Lib/Lab alliance.

Housing Associations

Mr. Gwilym Jones: asked the Secretary of State for Wales what level of support he is giving to housing association activities in Wales.

Mr. Mark Robinson: My right hon. Friend has increased support for the housing association movement in Wales by 22 per cent. in 1987–88 to £54·7 million. With receipts, this will allow a gross Housing Corporation programme of nearly £59 million and is ample evidence of our continuing commitment to the housing association movement in Wales.

Mr. Jones: May I remind my hon. Friend of the recent announced partnership between a housing association, Cardiff city council and free enterprise sector capital to build over 600 new homes in St. Mellons? Many of those


homes will be let to people on the council housing waiting list. Does he agree that this scheme offers a much more imaginative way forward, which I hope will be followed by other schemes in Wales?

Mr. Robinson: I entirely agree with the sentiments that my hon. Friend has expressed. Of the amounts that I have mentioned this afternoon, the Housing Corporation has set aside £10 million for such schemes in Wales. I am pleased to announce that projects similar to the St. Mellons scheme, but on a smaller scale, have been approved at Abergavenny, Chepstow and Camarthen. A number of others are under further consideration.

Mr. D. E. Thomas: Although I welcome the increased funding for housing associations, can the Minister tell us how his figure of allocation agrees with the bids put in by housing associations in Wales or by how much it falls short? What is the declared capacity of the associations to build units as compared with the allocations made?

Mr. Robinson: That is not a matter for me; it is a matter for the Housing Corporation. The reaction that I have had from housing associations in Wales shows that they are extremely pleased with the increase in resources that they have been given. Over the last two years those resources have been given a boost of 40 per cent.

Mr. Anderson: Will the Minister ensure that all local authorities in Wales are encouraged to follow the model of the St. Mellons scheme, which is wlecome? Will he say, as a matter of policy, whether he wants housing associations to build, not for specialist groups and not just for sale, but for the general list for rent?

Mr. Robinson: These schemes require the co-operation of local authorities. In the case of the St. Mellons scheme Cardiff city council is making land available and I hope that other authorities will be similarly involved. I hope that housing associations in Wales will undertake mixed and balanced programmes along the lines that the hon. Gentleman has described.

Oral Answers to Questions — DUCHY OF LANCASTER

County Palatine

Mr. Wigley: asked the Chancellor of the Duchy of Lancaster if he is yet in a position to announce the date of his visit to the county palatine early in the new year, referred to in his answer of 17 November, Official Report, column 302; and if he will make a statement.

The Chancellor of the Duchy of Lancaster (Mr. Norman Tebbit): I hope to visit the county palatine next on 10 March in place of 31 March date to which I referred when I last answered questions.

Mr. Wigley: When the right hon. Gentleman goes to the county palatine, will he tell the residents whether he regards it as a success of his Government's policy that 94 per cent. of the job losses since this Government came into office have taken place in the north and west of these islands, including the north of England, Wales and Scotland, and whether his answer to the unemployment problem is still that people should get on their bikes?

Mr. Tebbit: Given the time that the hon. Gentleman had to rehearse his supplementary question, he has not done terribly well on it. Unemployment is now falling in

the United Kingdom. Jobs are being created at a very high rate in the north and west, just as they are in the south. However, it is not surprising that during a period of worldwide decline in such heavy industries as shipbuilding and steel the major job losses in Britain should have been concentrated where those industries are situated. The Government's regional and other policies are doing everything possible to regenerate jobs in those areas. The actions of some Labour local authorities are not conducive to helping in that process.

Mr. Sumberg: Does my right hon. Friend recall that on his last visit to the county palatine, and in particular to Bury, he performed the topping-out ceremony of a new unit at Fairfield hospital? That unit had waited for years to be constructed under a Labour Government. Does he agree that it has taken a Tory Government to build the hospitals, whereas the Opposition merely talk about them?

Mr. Tebbit: My hon. Friend is right. Many of the hospitals currently being built by this Government, and the many which have already been completed, were taken out of the Labour Government's programme during the IMF crisis 10 years ago. We should not be surprised at that, because I am reminded that it is just 19 years ago today that the Labour Government announced slashing expenditure reductions which involved postponing the raising of the school-leaving age, led to the introduction of prescription charges, the slashing of the housing programme by 165,000 houses a year and the slashing of defence expenditure. Of course, that is quite normal for Labour Governments, and the Chancellor of the Exchequer at the time was the right hon. Member for Glasgow, Hillhead (Mr. Jenkins), who has now been given the job as economic spokesman for the SDP.

Mr. Winnick: When the right hon. Gentleman visits the county palatine, will he explain to the people there why he was quite willing to come here in his chauffeur-driven car on Friday to vote down a private Member's Bill that would have assisted some pensioners? Since there has been a great deal written about what he did or did not say about Tories with a conscience, does his conduct on Friday demonstrate that he has much of a conscience?

Mr. Tebbit: Well——

Mr. Winnick: Well…

Mr. Tebbit: I felt that I should vote against a measure that would cause an extra burden of taxation to fall upon young widows in order to give free television licences to my noble Friends the Lord Hailsham and the Lord Whitelaw.

Mr. Silvester: asked the Chancellor of the Duchy of Lancaster if he is yet in a position to give the date of his proposed visit to the county palatine early in the new year, mentioned in his answer of 17 November, Official Report, column 302; and if he will make a statement.

Mr. Tebbit: I refer my hon. Friend to the answer that I gave some moments ago.

Mr. Silvester: By the time my right hon. Friend gets to the Duchy, will he make an estimate of the number of people whose jobs will be affected if we were to follow non-nuclear defence and energy policies?

Mr. Tebbit: It would be difficult to make a full estimate of the number of people. British Nuclear Fuels Limited at


Sellafield, Springfields and Risley employs 16,000 people, the United Kingdom Atomic Energy Authority, principally at Risley, employs 3,900, the National Nuclear Corporation at Booths Hall and Risley employs 2,300 people, and the CEGB at Heysham 1 and 2 nuclear stations employs 1,250 people. There are, therefore, some 23,000 employees directly in the north-west. BNFL alone estimates that its programme supports a further 50,000 jobs, mostly in the north-west. On top of that, we could add all the Vickers jobs on the new Trident nuclear submarine programme. All in all, an impressive number of jobs would be thrown away by a Labour Government if we ever had that misfortune visited upon us.

Oral Answers to Questions — PUBLIC ACCOUNTS COMMISSION

National Audit Office

Mr. Dalyell: asked the right hon. Member for Taunton, answering on behalf of the Public Accounts Commission, what criteria the Commission uses in appointing the Accounting Officer for the National Audit Office.

The Chairman of the Public Accounts Commission (Sir Edward du Cann): In appointing the serving Comptroller and Auditor General to be Accounting Officer for the National Audit Office Vote with effect from 1 January 1984 the commission followed the long-standing practice of appointing the officer in the best position to discharge overall responsibility for policy and for the resources allocated to the office. The C and AG, is of course, by statute, head of the National Audit Office.
I am sure that the right hon. Member for Ashton-under-Lyne (Mr. Sheldon) will concur with me when I say—I am glad to have the opportunity to make the point—that I believe that the House of Commons and the nation are well served by the Comptroller and Auditor General and his colleagues in accordance with the long-standing tradition of competence of that office.

Mr. Dalyell: May I ask the right hon. Gentleman a question of which I gave him notice last month? Can he say whether, in appointing the Accounting Officer, his ability to take a grip on the financial control of the security services is taken into account? Is not this matter given added importance by the controversy over electronic surveillance data that has blown up in the past three days? It is one of a number of controversies that make it important that the Public Accounts Committee, on behalf of the House, should have oversight of the security forces and what they do.

Sir Edward du Cann: The duties of the Comptroller and Auditor General in regard to the security services are covered by long-standing arrangements that were endorsed by the Public Accounts Committee. Expenditure on the secret service is accounted for by the Cabinet Office. The Comptroller and Auditor General does not examine the records relating to this expenditure, but, instead, receives personal certificates from the responsible Ministers of the Crown to the effect that the payments were properly made from the secret Vote in the public interest. He then certifies the Appropriation Account to this effect. If there is other expenditure on intelligence and security services that might be borne in other Votes, they will then be subject to full audit by the Comptroller and Auditor General.
I made inquiries about the hon. Gentleman's second point about the communications project, because I thought it would be of interest to the House. I am told that the matter is still at a preliminary stage and that nothing like the sums that were referred to have been incurred. The House will be aware that the National Audit Office has full access to the Ministry of Defence records. The House will also be aware that arrangements exist under which the Chairman of the Public Accounts Committee is kept informed of such cases in which there are large expenditures.

Mr. Skinner: As the Accounting Officer may well come from the area known as the City, will the right hon. Gentleman take into account the fact that the field is scattered with individuals who would be suspect as accounting officers? Will the right hon. Gentleman steer clear of Guinness, Morgan Grenfell and all the other merchant banks that have been involved in swindling the public during the past few weeks?

Sir Edward du Cann: I am sure that it would be the wish of the House that I should make it absolutely clear that not only those of us who are concerned with the affairs of the Commission but the House in general have total confidence in the integrity of the Comptroller and Auditor General and his staff.

Mr. Williams: Will the right hon. Gentleman clarify one point? He said a few moments ago that nothing like the sums referred to in the press had been incurred. By that does he mean that they have not been incurred so far, or is he saying that they will not be incurred as the total cost of the project?

Sir Edward du Cann: I am told that the project is at an experimental stage. That is why no large expenditures, or no expenditures on the scale of those mentioned in the newspapers, have yet been incurred.

Oral Answers to Questions — DUCHY OF LANCASTER

Office Manpower

Mr. Winnick: asked the Chancellor of the Duchy of lancaster how many Civil Service staff are employed in his Office; and in what capacity.

The Chancellor of the Duchy of Lancaster (Mr. Norman Tebbit): Four: a private secretary, an assistant private secretary, a personal secretary and an administrative officer.

Mr. Winnick: Bearing in mind that virtually the whole of the right hon. Gentleman's time is spent at Tory Central Office, one wonders why he needs such a staff. Will he explain to the House why quite a number of his Cabinet colleagues have apparently let it be known that he made the alleged remark, namely, that nobody with a conscience votes Conservative? Why should so many of his Cabinet colleagues wish to do him harm?

Mr. Tebbit: First, although I spend a considerable amount of my time on the affairs of the Conservative party, which is the reason why I am not paid as a Minister out of public funds, I also have a considerable workload of Cabinet work and other work which is the concern of my four members of staff at the Cabinet Office.
Secondly, on the libel, which the hon. Gentleman repeated, I have no means of knowing whether Mr. Young


had an informant or whether he invented the alleged quotation himself. However, what I know is that it is a total fabrication and the only doubt is whether it was made up by Mr. Young or by some anonymous, unknown liar.

Oral Answers to Questions — HOUSE OF COMMONS

Telephone Calls

Mr. Dalyell: asked the Lord Privy Seal how many telephone calls from the Palace of Westminster have been logged in the past six months.

The Lord Privy Seal and Leader of the House of Commons (Mr. John Biffen): As I made clear in earlier replies to the hon. Member for Great Grimsby (Mr. Mitchell) on 5 December, at column 802, and on 10 December, at column 203, and to the hon. Member for Leyton (Mr. Cohen) on 19 December, at column 721, the call logging equipment is capable of storing only the date and time of each call made within the United Kingdom from extensions of the Palace of Westminster exchange; it does not cover direct lines or international calls. This information is stored for no more than two months. Figures for the number of calls logged in the past six months are, therefore, not available.

Mr. Dalyell: Is the Lord Privy Seal saying unequivocally that there is therefore no logging whatsoever of any calls that may have taken place between the office of my right hon. Friend the Leader of the Opposition and the office of Mr. Malcolm Turnbull in Australia?

Mr. Biffen: Certainly, If the hon. Gentleman studies tomorrow my answer, he will see that direct lines or international calls are specifically excluded.

Mr. Hickmet: Can my right hon. Friend confirm that the embarrassment of the Leader of the Opposition in conducting conversations with a lawyer representing a defendant in a case where the Crown is the plaintiff and where issues of national security are concerned will not be saved by making spurious allegations about his telephone being bugged? The answer is that for cheap political gain and cheap political purposes the Leader of the Opposition is prepared to stoop to whatever tactics are available.

Mr. Biffen: I do not think that I can helpfully add to the reply that I have just given.

Mr. Williams: The Leader of the House said that direct calls and international calls are not logged. Have I misunderstood the House of Commons system? Is it not a fact that if somebody wants to make an international call he has to go via the House of Commons operator? Therefore the call must be logged.

Mr. Biffen: I do suggest that the hon. Gentleman should study the answers that I have given. I have said specifically that international calls are not logged. The hon. Gentleman could check that with the Accommodation and Administration Sub-Committee, which was responsible for the equipment being installed.

Sales Kiosk

Mr. Greenway: asked the Lord Privy Seal what were the takings in (a) the month and (b) the year up to 24 December 1986 at the House of Commons sales kiosk; and if he will make a statement.

Mr. Charles Irving: I have been asked to reply.
The takings of the Refreshment Department's souvenir kiosk in the four-week period and the 12-month period to 24 December 1986 were £182,122 and £504,404 respectively. These figures include VAT and are a record for the Department.

Mr. Greenway: I congratulate my hon. Friend and all concerned with the remarkably hard work behind those figures. May I ask, first, to what use is any profit included in those figures put, and, secondly, will there by any price reductions? Is he aware of the recent, welcome innovation of selling House of Commons humbugs? Is he further aware that these are sold in a three quarter pound tin at £2·50, whereas in the shop down the road the same weight can be bought for under 80p? Why are House of Commons humbugs so expensive?

Mr. Irving: I am grateful to my hon. Friend for his kind remarks about the Department. All the staff who have achieved this marvellous result in difficult working conditions in a kiosk which is 6ft by 23ft deserve our thanks. The staff of the whole Department deserve our thanks.
My hon. Friend asks what we do with the money. I can assure him that it is dealt with in an entirely respectable way, unlike things that sometimes happen outside. The money will be reinvested to improve facilities for members of staff and Members of this House, who will have seen a few improvements since 1979. We have a responsibility to see that the budget balances and that we do not call upon the taxpayer for further resources.
My hon. Friend refers to humbugs. If he talks to me afterwards, I can talk to him in greater detail. However, I must advise him that there are two sorts of humbugs—cheap ones that can be bought outside the House, and exclusive, delicious, succulent ones that can be bought in this House. For the quality that we offer, we consider that the price is most reasonable.

Office Accommodation

Mr. Dormand: asked the Lord Privy Seal if he will make a statement on the latest progress being made in providing additional office accommodation for hon. Members.

Mr. Biffen: Work has now begun on the redevelopment of the area between Parliament Street and Cannon Row, and this scheme is still on schedule for completion in 1990. In addition, as hon. Members will have noticed, the writing rooms above the Division Lobbies were converted into Members' offices during the last summer recess.

Mr. Dormand: Is the Lord Privy Seal confirming that the first phase is likely to be completed by its target date? Secondly, what progress is being made on the second phase? How many additional offices have been made available to hon. Members within the Palace of Westminster during the past 12 months?

Mr. Biffen: On the third point, I cannot be absolutely certain that I have noticed how many offices have been made available, but that will be covered by the reference to the Members' offices that were converted from the rooms above the Division Lobbies. As to the first question, I can confirm that what is popularly known as phase 1 is on schedule for completion in 1990, but at the moment I have nothing further to report on phase 2 beyond what was last said.

Mr. Stokes: Is there any correlation between the size of a Member's office and his contribution here?

Mr. Biffen: Absolutely none. Were there to be such a correlation it would be an invidious task for those operating through the usual channels to have to allocate the offices.

Mr. Soley: Will the right hon. Gentleman also accept that all Ministers would have to abandon their offices if he were to follow the guidance of the hon. Member for Halesowen and Stourbridge (Mr. Stokes)?
Is the right hon. Gentleman aware of the increasing concern among a growing number of hon. Members on both sides of the House about the inadequacy of offices for Members, personal assistants and secretaries, which has been partly brought about by the changing nature of the job? Should not the aim be to enable Members of Parliament to have proper secretarial facilities close to the office in which they work, not about half a mile away, as happens in some cases, so that we can do our job more efficiently?

Mr. Biffen: The hon. Gentleman would argue himself into some difficulties if he asserted that Members had to have accommodation close by their secretaries. Many Members want the repossession of the Palace of Westminster by Members, which would mean that research assistants and the rest would be housed elsewhere. That kind of dilemma will make this a highly topical and contentious issue long after we are drenched with accommodation.

Northern Ireland Business

Sir John Biggs-Davison: asked the Lord Privy Seal if he has any proposals to reform the conduct of Northern Ireland business; and if he will make a statement.

Mr. Biffen: At present none, Sir.

Sir John Biggs-Davison: While the Northern Ireland Office is addicted to the separate statute book, does my right hon. Friend think that it is in keeping with our system of parliamentary government that Northern Ireland legislation should be done, and should have been done for so many years, in the form of unamendable Orders in Council, only briefly debated?

Mr. Biffen: My hon. Friend makes the point fairly and he will recall that last February an invitation was issued by my right hon. Friend the Prime Minister to the leaders of the Unionist parties to discuss whether alterations should take place in our system of handling Northern Ireland legislation, and there the matter rests.

Mr. Dalyell: On a point of order, Mr. Speaker.

Mr. Ray Powell: On a point of order Mr. Speaker.

Mr. Speaker: I shall deal only with points of order arising out of questions. I shall take the point of order of the hon. Member for Ogmore (Mr. Powell) first.

Mr. Powell: I know that you will appreciate, Mr. Speaker, that this is a point of order directed to you and and I am sure that you will give the matter serious consideration. Today, Welsh Questions started at 2.35 pm and ended at 3.10 pm and seven questions out of 24 were reached. I appeal to you, Mr. Speaker, to give further consideration, along with the House of Commons

(Services) Select Committee, to ensuring that Welsh Questions have the full allocation of time from 2.35 pm until 3.30 pm so that matters affecting all constituents in Wales can be aired once every third week in the Chamber. I ask you, Mr. Speaker, kindly to review the matter so that that can be accomplished.

Mr. Speaker: The timing of Questions is not a matter for me——

Mr. Peter Bruinvels: On a point of order, Mr. Speaker.

Mr. Speaker: Order. I am dealing with a point of order. The timing of Questions is a matter to be taken up through the usual channels. In fact, we dealt with nine questions. Questions 19 and 24 were taken with other questions. I do try during Welsh Questions, as the hon. Member for Ogmore (Mr. Powell) will see if he looks at the Order Paper, to call every Member who has a question on the Order Paper. The hon. Gentleman was not rising at a moment when I could have called him.

Mr. Williams: On a point of order arising out of questions, Mr. Speaker. You will recollect that during questions the Chancellor of the Duchy of Lancaster said that the statement that no one with a conscience would vote Conservative was—in his term—a libel. Clearly, we do not wish to raise anything in the House that is sub judice, and it has put my colleagues and me in a slightly difficult position. Since it is clearly, in his opinion, a libel, it might be helpful if he said whether a writ has been issued so that we know whether we can discuss the matter.

Mr. Speaker: Order. That is not a matter for me.

Mr. Peter Bruinvels: On a point of order, Mr. Speaker. I apologise for being rather over-keen when you were giving a ruling on the first point of order.
Extremely long answers were given to questions 30 and 32 on the National Audit Office and humbugs. I had questions to the Church Commissioners and to my right hon. Friend the Leader of the House. Could such lengthy answers be recorded rather than read out in full so that hon. Members would not be precluded from asking questions which they have come to the House specifically to ask?

Mr. Speaker: It is the luck of the draw. The hon. Gentleman will know that the arrangements as set out on the Order Paper is that questions to the Chancellor of the Duchy of Lancaster take precedence over those to the hon. Member answering for the Church Commissioners on this one day.

Mr. Peter Bruinvels: What about the length of answers?

Mr. Speaker: I am not responsible for the length of answers.

Mr. Skinner: On a point of order, Mr. Speaker. My right hon. Friend the Member for Swansea, West (Mr. Williams) raised an important matter about whether the libel matter is sub judice.

Mr. Speaker: Order. This is not a matter for me.

Mr. Skinner: It is.

Mr. Speaker: Well please try to make it so!

Mr. Skinner: When a matter is sub judice, it is then for Mr. Speaker to tell hon. Members before questions, "Do not get involved in that particular matter because it is sub


judice." Here we have a statement by a member of the Tory Cabinet, telling us that the allegation is libellous. We want to know from this silent right hon. Gentleman, who is usually so voluable, whether he has issued a writ in respect of this case. Hugo Young writes his column tomorrow, and some of us might even read it, so we want to know. You should know as well, Mr. Speaker, so that you can rule hon. Members out of order, if necessary.

Mr. Speaker: Order.

Mr. Hickmet: rose——

Mr. Speaker: Order. It does not help to have more points of order. We shall all know in due course.

Mr. Hickmet: Further to that point of order, Mr. Speaker. It has been characteristic of the manner in which the Opposition have conducted their opposition in this Parliament that they have used personal innuendo in the Chamber, which is protected by privilege, to make defamatory statements about Conservative Members. For the shadow Leader of the House to condone such behaviour is unparliamentary. Perhaps——

Mr. Speaker: Order. This is a clear case of a continuation of Question Time. The House must find other ways to raise this matter.

Mr. Dalyell: On a point of order, Mr. Speaker. It will be within your recollection that, at the end of last year, you

wrote a long and serious letter about telephone tapping. You will have heard the exchanges today at Question Time. I do not doubt the good faith of the answer given by the Leader of the House, but there are problems here, because international calls appear to be being logged—I do not know whether that is the right term. They are made a note of and registered. There may have been a misunderstanding. Could either you or the Leader of the House consider the issues involved in this, or could the Leader of the House make it clear what his answer involves in relation to international calls of which a note is made? Part of the difficulty in all this is the terminology involved. For instance, my hon. Friend the Member for Blaydon (Mr. McWilliam), who is a telephone engineer, says that telephone tapping is the wrong term and one should talk about electronic interference. The niceties of language do not cover the important substance of the issue. It may be that the Leader of the House would like to clear up the position in relation to international calls when he has the opportunity to do so.

Mr. Speaker: The Leader of the House will have listened to that.

Mr. Biffen: I am anxious to help the House. I answered the question that was tabled. I am happy to discuss the matter further with the hon. Gentleman.

Local Government (London)

Mr. Tony Marlow: I beg to ask leave to move the Adjournment of the House, under Standing Order No. 20, for the purpose of discussing a specific and important matter that should have urgent consideration, namely,
the breakdown of local government in parts of the capital".
You will have read in yesterday's Sunday Telegraph, Mr. Speaker, that local government is breaking down in Brent, Camden, Hackney, Haringey, Islington, Lambeth, Lewisham and Southwark. In these areas, which above all have one thing in common—they are all Socialist-controlled—costs of providing services are more than twice as great as in similar areas elsewhere, while services are worse, lamentably worse.
The appalling standards of ILEA, where only half those leaving school have O-level equivalent, combine with the Socialist ethos in these boroughs in such a way that, in the richest city in the kingdom, overflowing with work opportunities, one third of men aged between 20 and 24 contrive to claim to be unemployed. That is rose petal Socialism in action. The wrapping may have changed, but the rotten can of writhing snakes is still inside.
The matter is urgent, because of creative accounting. Vast debts are daily being built up which, if met by the local authorities, will lead to further chaos and anarchy. If met elsewhere, there will be a totally unjustified burden on the general taxpayer in order to right the problem. Already, a massive £700 million is owed through deferred purchase schemes. We read today that Haringey may be considering pawning the mayoral regalia along with the office furniture.
It is one thing for the Leader of the Opposition to indulge his fifth form macho fantasies in Ealing; it is another for the long-suffering citizens of London to be socially mugged by his party—the creative force behind urban deprivation. The Labour party does not care. There is urgent need for action from a Government who do. We should debate that now.

Mr. Speaker: The hon. Member has asked leave to move the Adjournment of the House, under Standing Order No. 20, for the purpose of discussing a specific and important matter that he believes should have urgent consideration, namely,
the breakdown of local government in parts of the capital".
I have listened with care to the hon. Member. I regret that I do not consider the matter that he has raised to be appropriate for discussion under Standing Order No. 20, and I cannot, therefore, submit his application to the House.

Local Government Finance Bill

Dr. John Cunningham: On a point of order, Mr. Speaker. I seek your guidance on the conduct of the main business before the House today. As all hon. Members are aware, conventions are laid down regarding notice and our procedures following the publication and Second Reading of Bills which are to be considered by the House. In that connection last Thursday I received from the Secretary of State for the Environment a letter which asked me to agree, on behalf of the Opposition, to a method of procedure for consideration of the Bill. I received that letter on Thursday at about 1 pm. It made no mention of the fact that later that day the Government intended to table 38 amendments, two major revisions of clauses and a new schedule, which itself extends to more than 2,000 words.
That information was not printed on the Order Paper until the following day and was not available in the House until after 1 pm on Friday afternoon. That means that no one in local government affected by the legislation had any opportunity over the weekend to consider the legal or financial implications of the changes to the Bill Even worse, the Government have presented us, at a very late stage, with notes on clauses which refer to the Bill as it stands and not to it as it is affected by the Government's amendments.
Such are the depths of confusion and chaos that it is a fair guess that even now scribes are busily working away in the Department of the Environment to amend the amendments. In December, the Secretary of State for the Environment claimed that he was the only person who properly understood what the law was in these matters. Even if that is true, he is signally unable to communicate it to anyone else, even, apparently the officials in his own Department.
The reality is that it would be to the disadvantage of everyone concerned, and certainly to this House and to local government, if we were to consider these matters today—matters, I emphasise, which have major legal and financial significance for the whole of local government and for the totality of rate support grant to be paid for the coming financial year.
I understand that, under the Standing Orders, and specifically Standing Order No. 34, it is possible for you, Mr. Speaker, to accept a motion to adjourn so that we do not consider this business today, thus enabling the Opposition and, for all I know, many Conservative Back Benchers, and certainly those in local government., to consider the major implications of what is proposed before they are considered by the Committee. I seek your guidance and advice in the interests of our protection, Sir.

Mr. Speaker: The proper place to debate this issue is after the Orders of the Day have been read and the House has gone into Committee. I understand that the Chairman of Ways and Means has selected amendments up to clause 9 for consideration today. The hon. Member will have seen from the Amendment Paper that a procedural motion on the order in which the Bill should be considered has been tabled. The debate on that motion is the proper time to raise this matter.

Mr. Andrew F. Bennett: Further to the point of order, Mr. Speaker. With the greatest


respect, I put it to you that your duty is to protect the Members of the House and people generally in respect of legislation. You have just suggested that we have a remedy that we can use when the House goes into Committee, but, as I understand it, we may put our points not to you but to the Chairman of Ways and Means, or whoever is in the Chair. It seems to me that we are facing a difficult matter in that the Government are legislating to put right that which the courts found the Secretary of State to have done. Therefore, we have every reason to want to be able to consult local authorities about the legal implications of this legislation.
I found it impossible to get hold of the schedules and to consult either the Stockport or the Tameside local authority to ascertain the legislation's implications. I should have thought that, if we are to have good legislation, it was essential that you protect the rights of Members and people outside the House to consult about the legislation, so that we can make speeches that are relevant to it and can try to persuade the Government to amend it according to the advice from outside. I understand that it will be impossible for us to do that.
I should have thought that, at this stage, Mr. Speaker, you could accept an Adjournment motion so that we can develop our arguments and the Government can justify their great haste in pushing through the legislation without allowing any of us the right to consult local authorities in the areas from which we come.

Mr. Tony Banks: rose——

Mr. Allen McKay: rose——

Mr. Nigel Spearing: rose——

Mr. Speaker: Order. Points of order take up time. I think that I can deal with this matter. As the House will know, I have no authority to determine the business of the House. I do not control the order of business. That is a matter for the Leader of the House and the usual channels. Under Standing Order No. 9 it is not possible for me to accept a dilatory motion from the hon. Member at this stage before the orders of the day have been entered upon.

Mr. Spearing: Further to the point of order, Mr. Speaker. You kindly mentioned in your reply to my hon. Friend the Member for Copeland (Dr. Cunningham) that the Chairman of the Committee could deal with this matter because a procedural motion was likely to be moved before we proceeded with the Bill. Even if that procedural motion were moved, the strict limits of the debate would be of the order of proceedings and not whether it was right to proceed with considering the Bill.
Will you confirm that the point that concerns my hon. Friends could be raised with the Chairman of the Committee at the commencement of the Committee proceedings and that, under Standing Order No. 34, it would be open to the Chairman, if he saw fit—if he did not think that it was an abuse of the rules of the House—to accept a motion to adjourn the Committee and beg to ask leave to sit again if that Question were not put forthwith? I understand that that procedure might be followed. Will you confirm that as it might be helpful in Committee?

Mr. Speaker: I can confirm that the Committee is the proper place to raise these matters. When Members get

into Committee they will have an opportunity to suggest alternatives to the Secretary of State's procedural motion. It will be up to the Chairman of Ways and Means to consider the matter.

Mr. Peter Shore: Further to that point of order, Mr. Speaker. We understand what you are saying about standing order No. 34 and whether it may be more appropriate for the motion to be moved after you have left the Chair. However, I submit to you, Mr. Speaker, that it is very much for you to give your view about the general conduct of the business today. I should like to re-emphasise the point made by my hon. Friend the Member for Copeland (Dr. Cunningham) that we are very much governed by procedure in the handling of Bills and that a major departure from the conventions is of great disservice to the House. That is what has happened on this occasion.
If complicated new amendments are tabled and made available only on Friday afternoon at 1 o'clock, it rules out all possibility of Opposition Members tabling amendments. Today we are dealing with a provisional selection of amendments that ends with clause 9. I submit that the matters raised in the complicated schedule alone deal with a large number of clauses long before clause 9 is reached. Therefore, the possibilities of amendment and debate of those serious matters are pre-empted if we proceed today.
I ask you, Mr. Speaker, at least to give your view to the House as to the way in which the matter has been handled and whether, in your view, it is a matter with which we should proceed at this stage?

Mr. Speaker: I thank the right hon. Gentleman. Of course, he knows that the role of Mr. Speaker is to ensure that the matters raised are in order. It is not his role to express views on how matters have been handled so long as they are in order.

Mr. Tony Banks: rose——

Mr. Speaker: Order. I have already advised the House that I have no authority to do this, and that I do not select the amendments for discussion in Committee. The House should proceed to the Committee stage, where that matter can properly be debated on the Secretary of State's motion.

Mr. Banks: Further to that point of order, Mr. Speaker.

Mr. Speaker: I will accept the point of order.

Mr. Banks: I am sorry to have caused you so much anger, Mr. Speaker, by attempting to rise on a point of order. I should like you to accept my apologies immediately for having so concerned you.
However, the matter goes somewhat wider because it is a matter of order. The fact is that you have constantly told us—we have accepted it—that you are here to protect our rights as Back Benchers. The London borough of Newham is grievously damaged by the Bill. It could be argued that the Government are abusing the House by the way in which they are proceeding with the Bill. We are asking only for an opportunity to act as diligent Back Benchers, in order to protect the interests of those whom we represent. The point that I put to you, Mr. Speaker, is that we have not had a proper opportunity to do so.
Therefore, this is a matter of order, Mr. Speaker, and one upon which you can rule, because it touches upon our ability as hon. Members to protect and advance the interests of our constituents.

Mr. Speaker: There is no question of anger. I said what I did to the hon. Gentleman because he sought to interrupt me. The hon. Gentleman would not wish me to interrupt him.
I advise the hon. Gentleman and the House that I have no authority to do what is suggested. I do not select the amendments for a Committee stage; that is a matter for the Chairman of Ways and Means, and for the Committee, when we get there. Therefore, there is no point in raising the matter with me at this stage.

Mr. Eric Heffer: On a point of order, Mr. Speaker.

Mr. Speaker: Order. I am on my feet.

STATUTORY INSTRUMENTS, &c.

Ordered,
That the draft Weights and Measures (Carriage of Solid Fuel by Rail) Order 1987 be referred to a Standing Committee on Statutory Instruments, &amp;c.—[Mr. Durant.]

EUROPEAN COMMUNITY DOCUMENTS

Ordered,
That European Community Document No. 4133/86 on the legal protection of original topographies of semiconductor products be referred to a Standing Committee on European Community Documents.—[Mr. Durant.]

Orders of the Day — Local Government Finance Bill

Considered in Committee

[MR. HAROLD WALKER in the Chair]

Dr. John Cunningham: On a point of order, Mr. Walker. I raised a point of order with Mr. Speaker and he suggested that it was more properly a matter for you. I understand that it would be in order for me to seek leave to move that you report progress and ask leave to sit again. I ask you to accept such a motion because the Government have consciously and deliberately breached the normal convention of our procedures by bringing a large number of amendments of a technical nature, some of considerable length—I have mentioned a new schedule of over 2,000 words—before the House at such a time as to make it impossible for hon. Members to seek any legal or financial advice about them. It was impossible because it was done over a weekend.
The nature of the amendments seems to make a significant difference to almost 25 per cent. of the Bill so that we are really being asked to consider a Bill that is different from that which received a Second Reading on Monday 12 January. It is a measure of the incompetence of the Department of the Environment that its view of what is required to clarify the law seems to change from day to day. The Secretary of State tabled the amendments on Thursday, as I emphasised, having given no indication on Second Reading that he had any intention of doing so and having given no such indication in a letter to me dated 14 January 1987 seeking agreement about the handling of the Local Government Finance Bill in Committee.
I put it to you, Mr. Walker, not only that it is unfair, a breach of our conventions and unacceptable procedure, but that it is unacceptable to the Committee that we should discuss today these matters that are so vital not only to Opposition Members but to the whole of local government, which is affected by the Bill. Such is the apparent panic in the Department that the Secretary of State has provided us, apparently generously, with notes on clauses to the Bill. However, the notes refer to the Bill without any of his amendments. Therefore, we do not know whether the notes are of any real value. They may be positively misleading. Further, the amendments that were tabled seek to amend two clauses which are subsequently deleted by further Government amendments. That is another measure of the haste and confusion with which the Government seek to change the law, apparently to clarify it.
Although the new schedule may be debated much later in our proceedings—I accept that—it directly and materially affects clause 1, which is the first clause we are asked to consider. I draw your attention, Mr. Walker, to page 143 of the Amendment Paper.
Therefore, I submit that there is a very strong case why you should accept my motion to terminate our proceedings, to report progress and to leave to sit again at an appropriate time by agreement through the usual channels. That will have given us and the local authorities the opportunity properly to consider the amendments and their implications.

The Chairman of Ways and Means (Mr. Harold Walker): The hon. Gentleman has asked that I accept the motion to report progress and ask leave to sit again. I have listened carefully to the exchanges that preceded the House going into Committee. In the light of what was said then and what has just been said, I believe that it would be wise of me to exercise my discretion, and it is my discretion to accept the motion. I assume that the hon. Gentleman's speech has been in support of the motion. Perhaps he might now move it formally.

Dr. Cunningham: I am grateful for your use of your discretion, Mr. Walker. I beg to move, That the Chairman do report progress and ask leave to sit again.

4 pm

The Secretary of State for the Environment (Mr. Nicholas Ridley): I am happy to respond to the motion which you have accepted, Mr. Walker. However, I cannot advise the Committee to accept it. Perhaps I can allay some of the fears expressed by the hon. Member for Copeland (Dr. Cunningham).
The hon. Gentleman will know that when I discussed the procedure motion with him—which he subsequently said was agreeable to him—I told him that a number of Government amendments would be tabled. Indeed, many of the Opposition amendments were tabled at the same time as the Government amendments. I see no reason why the Committee should not proceed to consider both the Opposition and Government amendments in their turn.

Dr. Cunningham: rose——

Mr. Ridley: The hon. Gentleman will be relieved to know that the new schedule—which I agree is long and complex—simply replaces clauses 10 and 11 with some amendment thereto. He will realise that that is the last item to be taken in the manner in which the procedure motion is set out. Therefore, it is unlikely, in view of the number of amendments that must be covered before we reach Clause 9, that that schedule will be reached today. Indeed, if the hon. Gentleman considers——

Dr. Cunningham: Will the Secretary of State give way?

Mr. Ridley: I want to finish my sentence. If the hon. Gentleman considers the selection list, he will discover that there are only three groups of Government amendments before the Committee today. Indeed, there are only four Government amendments on the first page. When we come to debate these amemdments—and it might help the hon. Gentleman if he considers the arguments—he may discover that they are minor and technical amendments simply intended to clarify and improve the drafting of the Bill.
The hon. Gentleman has complained hitherto that the Government were slow to produce this legislation. I can assure him that the rush to introduce this legislation has meant further revisions suggested by leading and parliamentary counsel to clarify the purpose and meaning of the Bill.

Dr. Cunningham: I want the Secretary of State to consider carefully what he said. Will he confirm that at no time, in writing or in any other form, did he give notice to me or any of my hon. Friends that it was the Government's intention to table so many amendments? Will he also confirm that at no time did he give me any notice—verbally or in any other form—that one of the

amendments would cover a full page of the Amendment Paper, as does Government Amendment No. 175 on page 138 or that a second amendment—a new schedule—as I have already emphasised, would run to two and a half pages of the Amendment Paper?
Does the Secretary of State accept that there was no notification of any such amendment? There could have been no agreement—although I accept that I gave my agreement orally in response to the Secretary of State's letter—if we had been told of the Secretary of State's intentions. Will the Secretary of State confirm the accuracy of my remarks? It is very important for future relations that he should do that.
The other general issue on this point is that it is a simple statement of truth that we have had no opportunity to consider the amendments. This is not a fabricated argument. No one in the House could possibly have absorbed the implications of the amendments in the time available to us. Therefore, we should not proceed at this point. I hope that the Secretary of State will at least confirm what I have said about the exchanges.

Mr. Ridley: I was glad to hear the hon. Gentleman confirm that I warned him that a number of Government amendments would be tabled.

Dr. Cunningham: Twister.

Mr. Ridley: I did not go into details about the number of amendments or their length. He has acknowledged my point that the amendments in no way change the substance of the Bill in any major fashion.

Mr. Allan Roberts: How do we know?

Mr. Ridley: I have been explaining that to the hon. Member for Copeland. That point will be revealed when we debate the amendments. If the hon. Gentleman does not believe me, I hope that he will let the Committee proceed to consider the amendments and in due course what I have just said will be found to be the case.
It is not right that this urgent Bill, which is necessary if rate support grant is to be paid to local authorities, should be delayed. It is perfectly within the rules of Committee procedure, as the amendments were tabled on time, and I must stress that many of the Opposition amendments were tabled at the same time. I have not stinted to do the work necessary to consider the Opposition amendments and so to be able to respond perfectly properly to those amendments.

Mr. Tony Banks: Will the Secretary of State give way?

Mr. Ridley: I do not see why what is sauce for the goose should not he sauce for the gander in this case. I invite the Committe to proceed with the Bill.

Mr. Tony Banks: I was hoping to catch the Secretary of State's eye before he finished his remarks, because I wanted to ask him whether his mind was made up in relation to his opposition to the motion. However uncomfortable we may find the fact, the Opposition accept that the Government will get their business through. That is the function of government. Indeed, the Government have the majority to add an eighth day to the week if they see fit to do so. Considering some of the Government's recent policies, I would not be at all surprised if that was a later motion.
Before we consider the Bill, the Secretary of State must accept that we want to consider the clauses and the


amendments to the clauses very carefully. This is not a time wasting effort by the Opposition. The Secretary of State may laugh at that, but I hope that he will accept my word on this occasion if on no other when I say that I want to ask him to give us a genuine opportunity to investigate and consider and consult our constituents, and especially the borough councils affected, about the full implications of the amendments that we have not had the opportunity to consider until now.
When the Secretary of State defended the position—which I agree that he inherited—that the procedures followed by local authorities and by his Department did not conform with the law, he said that it was in part the Opposition's fault for not spotting the deliberate mistake built into the legislation. Obviously we said that that was nonsense. It was not our fault. The Government govern and the Opposition oppose. However, there is something in the Secretary of State's point. If we had had more of an opportunity to consider the full implications of previous legislation, we might not have allowed the Government to make the mistake that they eventually made in the legislation that appeared on the statute book.
I put it to the Secretary of State, using his own argument, that this must be the opportunity for us to consult the borough councils—I am obviously concerned about Newham—to consider in some detail what the Government's amendments mean. We should then have an opportunity to parade our arguments and voice our feelings. I know that, in the end, we shall be voted down by the Government's majority, as they must get their business, but at least we could do justice to the arguments. I do not believe that the Secretary of State is giving us ample opportunity to do that.
Everybody accepts that local government finance is getting into such a morass that not one hon. Member can honestly say that he or she understands the current system, how it operates and how it would truly be changed by the Bill. I have been in local government for 16 years and I have a great deal of feeling for it, but I would not suggest that I understand everything in the Bill. Although we are here to oppose, we are in a way party to legislation which the House passes, and it is up to us to try to spot the defects. I should not like to be party to yet another piece of legislation that makes it that much more difficult to understand how local government finance works.
The Secretary of State should talk to the Leader of the House. That does not require a great deal of physical effort on his part, as his right hon. Friend is sitting right next to him. How can we have any confidence that, when the Bill is enacted, it will not be faulty in some way and therefore lead to even more confusion in local government? I ask the Secretary of State with whatever persuasive powers I have—I know that I have very few with him, and I would not want it to be any different—to think carefully and accept the motion in the interests of good order, the House, local government and good legislation, although we disagree, root and branch, with the Bill.

Mr. Ian Gow: Exceptionally, you, Mr. Walker, have exercised a discretion that is conferred on you to accept the motion moved by the hon. Member for Copeland (Dr. Cunningham) that you should report progress and ask leave to sit again.
One might think that the progress which the Committee would be able to report would be scant, but the Committee is not more likely to accept the motion as a result of the

speech made by the hon. Member for Newham, North-West (Mr. Banks), who is not a particularly creditable example of the wisdom of those people who have been engaged in local government.
The hon. Member for Copeland (Dr. Cunningham), who is normally scrupulously fair, has acknowledged that he tabled amendments on the same day as my right hon. Friend the Secretary of State tabled amendments. The hon. Gentleman is saying that the well-known and respected procedures of the House, which allow amendments to be tabled on a Thursday if they are to be considered by the Committee the following Monday, should be set aside in respect of this Bill and this Committee stage.
One week ago today, the House gave the Bill a Second Reading with a substantial majority. When my right hon. Friend the Secretary of State commended the Bill to the House, he did so on the basis that it would put the law into the condition which everybody, including the hon. Member for Copeland, believe it to be in.

Ms. Clare Short: That is not true.

Mr. Gow: Oh yes. It was my right hon. Friend and his advisers who discovered that the previous legislation did not have the effect that Parliament intended it to have.

Mr. Nigel Spearing: Will the hon. Gentleman give way?

Ms. Clare Short: rose——

Mr. Gow: I wish to develop my argument. I shall give way a little later.
The Bill's purpose was fully explained to the House and the House agreed and gave it a Second Reading. My right hon. Friend the Secretary of State is now being criticised because he has tabled amendments which you, Mr. Walker, have studied more closely than any other right hon. or hon. Member—with the sole exception of my right hon. Friend which you decided were in order and which you selected.
Of course it is open to the Opposition to move that you report progress and ask leave to sit again, Mr. Walker, but Conservative Members are entitled to say that everything which my right hon. Friend has done, including the tabling of amendments last Thursday, is wholly in order.

Mr. Tony Banks: We are not saying that it is out of order.

Mr. Gow: As the Opposition claimed on Second Reading that they would subject the whole Bill and, therefore, no doubt, possible amendments to it, to the most rigorous scrutiny one might have expected that the hon. Member for Copeland, who is a doctor, would have examined the amendments even before my right hon. Friend tabled them.
On Second Reading, the Opposition Front Bench said that it would subject the Bill to the utmost scrutiny. That being so, it might have subjected potential amendments to the most rigorous scrutiny. We have a most bizarre spectacle. The Opposition said that they would study the Bill closely, but they are unable to give due consideration to amendments which my right hon. Friend tabled on Thursday—the same day on which the hon. Member for Copeland tabled his amendments. We have not heard my


right hon. Friend whinge to the House because he has not had time to study the Opposition's amendments, which also were tabled last Thursday. On the contrary, my right hon. Friend, dragging himself away from the——

Dr. Cunningham: Will the hon. Gentleman give way?

Mr. Gow: Or course I shall give way to the hon. Gentleman, whom I would otherwise call my hon. Friend.

Dr. Cunningham: I am grateful to the hon. Gentleman for giving way and apologise for having had to leave the Chamber briefly, with the result that I missed his earlier remarks.
Why should it matter when the Opposition tabled their amendments? It is not us who are seeking agreement on a timetable for how we proceed, but the Government. Does the hon. Gentleman think that the Secretary of State should have been, dare I say, candid or honest about his intentions when he wrote to me rather than behave as he did?

Mr. Gow: It may just be that I have known my right hon. Friend a little longer even than the hon. Gentleman. Throughout the time that I have known my right hon. Friend, I have found him to be totally candid and honest at all times and in all circumstances. Therefore, I reject——

Mr. Frank Dobson: That is not what the courts said.

Mr. Gow: The hon. Gentleman must not rebuke my right hon. Friend because, on occasions, the courts have disagreed with him. That does not reflect upon my right hon. Friend's honesty and candour. If the Labour party seeks to rebuke my right hon. Friend on the grounds that he has been lacking in candour, it should recall that it was my right hon. Friend who came to the House to say that previous legislation did not have the effects hoped for by the whole House, including the Labour party.

Mr. Spearing: I am grateful to the hon. Member for Eastbourne (Mr. Gow). Earlier I attempted to interrupt when the hon. Gentleman said that the Bill would put back the law to what everybody thought it was. Perhaps the hon. Gentleman was not present a week ago today when my hon. Friend the Member for Copeland (Dr. Cunningham) said that, if that was all that the Bill would do, there would not be any great controversy. We believe—this has been admitted by his right hon. Friend the Secretary of State—that the Bill does a great deal more that is prejudicial to local government and the effect of any amendment is likely to be deleterious to local government. It requires the degree of scrutiny and consultation for which we are now asking.

Mr. Gow: I readily concede that the hon. Gentleman is right—the Bill introduced by my right hon. Friend has a twin purpose. It is, first, to restore the law to that which the House and the other place intended when the legislation was passed in 1980. Its second purpose, which will be immensely welcomed by those, like myself, who live in the Soviet republic of Lambeth, is to give certain further protection to innocent ratepayers—[Interruption.] During the week I happen to live in Lambeth and as a ratepayer I am entitled, along with the great majority of other ratepayers in Lambeth, to say that we welcome the

other proposals in my right hon. Friend's Bill that will give further protection to ratepayers. Many ratepayers in Lambeth are absolutely scandalised by some of the expenditure incurred by that council.

Mr. Stuart Holland: Will the hon. Gentleman specify what excesses he is talking about? Is he aware that last week the boroughs of Lambeth and Camden and other Labour-held boroughs did a great deal to make provision for the elderly and others——

The Chairman: Order. I think it would be unwise for the Committee to start talking about such matters. They are not the subject of the Question before the Committee.

Mr. Gow: I would be very happy, if I catch your eye during the later Committee stages, to give a list of the quite outrageous expenditure incurred by Lambeth borough council——

Mr. Dennis Skinner: Tell us about Eastbourne.

Mr. Gow: We are not talking about Eastbourne——

The Chairman: Order. I hope that the hon. Member for Eastbourne (Mr. Gow) will have equal regard to the remark that I addressed to the hon. Member for Vauxhall (Mr. Holland). We shall see what is permissible when we come to the later stages of the Bill, but for now I hope that we shall stick to the Question before the Committee.

Mr. Gow: I submit myself entirely to your ruling, Mr. Walker and I shall refer to the expenditure of Lambeth on a later occasion.
It has been agreed, even by the Opposition Front Bench, that it was, in every respect, wholly in order for my right hon. Friend to table the amendments that he did on Thursday. Over the weekend, the Opposition have had time—the time scale has been followed on many occasions—to consider those amendments. On the same day, Thursday, the Opposition tabled a number of amendments to the Bill. It is perfectly proper that the Committee should now embark on a due consideration of those parts of the Bill that are down for discussion today.
I hope that the Committee will reject the motion moved, most unwisely, by the hon. Member for Copeland (Dr. Cunningham). The Bill ought to be on the statute book at the earliest possible moment. We ought to embark on the Committee stage today as envisaged. I hope that the Committee will reject the advice of the Labour party.

Mr. Michael Meadowcroft: I support the motion moved by the hon. Member for Copeland (Dr. Cunningham). The Opposition House consists of a number of Opposition parties. It may be that there are some critics on the Conservative Benches. I hope that there are, because many Conservative local authorities will find themselves in severe difficulties if this legislation goes through.
The exigencies of the electoral system dictate that there should be one spokesman from the alliance in this debate. That does not mean that the matters before us are any the less important. There are a number of Ministers present with their parliamentary private secretaries—the Box can hardly contain all the officials here to support the Ministers. There are also a number of spokesmen present for the official Opposition.
The Government have tabled a whole series of amendments of the utmost complexity and it has been


exceptionally difficult to find enough advice in time to debate them effectively today. It is not just a question whether we have been able to consider those amendments over the weekend. In common with other right hon. and hon. Members I received a letter today from the Association of County Councils that stated:
The Government has also tabled a large number of amendments. It has been impossible in the short time available to analyse these in detail.
Yet here we are this afternoon expected to debate matters before us not because of any culpability on the part of the Opposition parties but because the Government got the legislation wrong. I should have thought that the Government, in the light of their experience, would have been rather more humble in coming before the House with all these complicated amendments. The list of selected amendments is one and a half pages long—and it goes up to only clause 9. There are 34 pages of amendments—some 200 amendments and new clauses. That is hardly conducive to the kind of detailed discussion and debate that Opposition parties and the House have a legitimate right to expect on such matters.
The hon. Member for Eastbourne (Mr. Gow) is right in the sense that we are seeking to put back the law to what we thought it was, but that is only part of it. It is generally accepted that if this Bill was limited to that purpose we would have readily accepted it and allowed it to to go through without any difficulty. However, the Secretary of State has once again used the threat that if this legislation does not go through there will be problems for local authorities with regard to the rate support grant.
This Bill contains many provisions that seek to introduce a great deal of uncertainty for local authorities—they will not be able to rely on their budgeting for next year because of what may have happened over the last five years—and it is somewhat rich and ironic for the right hon. Gentleman to say that it is uncertain what will happen to RSG if this Bill is delayed.
If the Secretary of State's sole concern is to find a way of bringing the RSG settlement before this House, he should have discussions with the usual channels. Those channels would be quite happy to have an interim settlement decided upon and that would make the local authorities happier in their belief that something constructive was being done about their problems.
It is not just Opposition Members who have brought these matters forward in previous discussions. I am sorry that the hon. Member for Acton (Sir. G. Young) is not in the Chamber. On Second Reading, as a former Minister in the Department of the Environment, the hon. Gentleman admitted that he did not understand the complexities of the RSG. He said that the more he tried to do so, the less grasp of the subject he retained.
If a Minister can say that, it is certainly not on for the Government to put before the House a whole series of highly complex new amendments, new clauses and schedules to the Bill and to expect us to debate them in a comprehensive and intelligent way.
Therefore, I hope that it will be possible to have the opportunity to consider the amendments in more detail and to secure the professional advice that we admit that we need to debate such matters thoroughly. I wish to consult those local authorities that my party has the honour to control, including the local authority of the hon. Member for Eastbourne (Mr. Gow). I wish to discover their views.
I hope that it will be possible to have such an opportunity. I hope that we shall not have bitterness developing over something which is crucial to many people in this country and which affects the finance and constitutional position of local government. Many of us on the Opposition side had the honour of serving for many years in local government and do not wish to see further legislation which will require more Bills and amendments and raise more legal problems. I beg the Committee to give us more time to consider the matter.

Mr. William O'Brien: I appeal to the Committee to support the motion because of the serious implications that the amendments will have for local government. We should have an opportunity to consider the amendments and especially the new schedule. I should like to consult the authorities that I represent, Wakefield and Leeds, because both are involved and will be affected by the proposed legislation.
Amendment No. 175 on page 138 of the Amendment Paper mentions information. It changes the old concept of the 1980 Act about information. It is important that we get this matter right in the first instance. If local government is required to supply information to the Secretary of State on the basis of which the Secretary of State would give judgment and perhaps act upon, it is right and fair that the local authorities should have an opportunity to consider the implications of this amendment.
Hon. Members have not had an opportunity to consult the local authorities that we represent and in which we are involved, and the local authority associations have not had an opportunity to give advice or to put their views on these amendments and the new schedule. It is important that, before we introduce any new legislation about information to be provided by local authorities to the Department of the Environment or, in particular, to the Secretary of State, the local authorities and their organisations should have an opportunity to consider in more detail and in depth the amendments and their legal implications.
The new schedule mentioned by my hon. Friend the Member for Copeland is causing great worry to local authorities. It specifically refers to the rate support grant and its special provisions. It also mentions consultation. If we are to have legislation affecting local authorities and the provision of rate support grant, it is only fair and just that those local authorities should have an opportunity to consult hon. Members about the implications of the new schedule.
Against this backcloth of the history of the Government's attack on local government, the motion is correct and should be supported. I hope that the Secretary of State, Conservative Members and the Government will see the importance of the consultation that should take place about the acquiring of information from local authorities. I hope that the Secretary of State and the Government will accept that there is a need for further examination of the new schedule, because of its implications for local authorities, and especially for the local authorities in west Yorkshire that I mentioned.
I ask the Committee to support the motion. We should allow the business to be so conducted that we can discuss the new schedule in detail and can return after consultations with our local authorities and with the local


authority associations. If we had such consultations, we could obtain all the information that we require in order properly to discuss the schedule and the amendments.

Mr. Andrew F. Bennett: I support the motion. It is clear that we have to protect the procedures of the House and the Committee. I fully appreciate that the Secretary of State is keen to turn everything to do with rates into a farce and to try to convince the country that rates are in such a muddle and a mess that it will be possible for the Government to abolish them without much opposition. That is one of his political aims and he has managed to continue to show so many problems about rates that that would go some way towards supporting his argument.
Any competent Secretary of State could produce a formula for sorting out the rate support grant which would demonstrate that the rating system works. His purpose in trying to discredit the rate system is political. The trouble with his Bill is that not only is it trying to discredit the whole rating process, it is in danger of discrediting the House. At this stage we ought to be very worried about the procedures of the House.
The hon. Member for Eastbourne (Mr. Gow) suggested that we were following precedent. Many of my hon. Friends have a lot of sympathy for the hon. Member. He is one of the few former members of the Government to resign on a matter of principle. I have sympathy for that, but we wonder where his future lies. One or two of us who have listened to his speeches recently think that perhaps he is trying to creep back.

Mr. Dobson: Whether he was going backwards or forwards, he was creeping.

Mr. Bennett: The alternative, of course, is that perhaps the hon. Gentleman sees his way to becoming part of the Chairman's Panel or developing in some way like that. Following his explanation of procedures, we should be wary of seeing him make progress in that direction.
The hon. Gentleman claimed that we were following normal procedure. Let us be clear. It is extremely rare for a rates Bill to be taken in all its stages on the Floor of the House. Almost always, such Bills go into Committee upstairs and there are very good reasons for that. The normal advantage for a Bill going through Committee is that it tends to take rather longer and the opportunities for detailed scrutiny are considerable. In addition, there is a considerable time between each of the stages. Therein lies the problem that has been introduced by this legislation.
Not so long ago the Bill was given a Second Reading. People outside did not have much opportunity to read the original Bill. On Thursday and Friday the amendments started to appear in large numbers on the Order Paper. If this Bill were going to Committee upstairs, the odds are that the first sitting would be tomorrow. Perhaps the Committee would get through the first group of amendments, and, if there was goodwill and a desire to make reasonable progress, it could possibly get through the second group. Therefore, people outside would have until about Thursday to consider most of the Bill.
People could probably expect the Committee to sit for up to four or five weeks if it was relatively non-controversial. At the end of the Committee's proceedings there would be an opportunity to consider how much

progress had been made and to prepare amendments for Report stage. That means that people outside would have considerable time in which to analyse the legislation, look carefully at the problems and bring forward their amendments. That is not what the Government intend. They are insisting that we debate the legislation today and that the amendments should be considered now.
Let us suppose that some valid points are raised. When must we table amendments for Report? The Government have not yet made it clear when they intend to take the legislation to Report. The implication is that the Government intend to take Report stage at some time on Wednesday. If the public want to consider the amendments made to the Bill and come forward with suggestions for Report stage they will have to produce them by tomorrow. It is totally out of keeping with the normal procedures of the House, which are to provide a reasonable period for scrutiny so that hon. Members can be well briefed and the public can adequately and accurately discuss the legislation.
The legislation is being rushed through. The House has a bad reputation for rushing through legislation. It is no good for hon. Members to claim that they are giving scrutiny to legislation if it is rushed through in this way. We shall simply run into interpretation problems in the courts or problems with the statutory instruments that arise from legislation. It is our fault if we allow legislation to be rushed through. That is why we should give careful consideration to the motion and consider whether we should say to the Government that we want adequate time in which to scrutinise the legislation, not only for the sake of our constituents and local authorities but for the reputation of the House, which should be concerned to pass good legislation.
I challenge the Secretary of State to tell us how quickly he thinks that Government Departments can get advice on the detailed legal meaning of clauses. Last week, the Select Committee on Statutory Instruments examined the problems that we encountered with the social security legislation. It took nearly nine months for that legislation to go through the House. It had full scrutiny. One group of amendments was accepted at a fairly late stage in the other place, and the Government are in the process of turning it into a statutory instrument. Quite clearly, they have run into difficulties with that statutory instrument. When the Scrutiny Committee asked for a memorandum, the Government asked for a fortnight in which to get legal advice. If the Government need a fortnight in which to get legal advice on a statutory instrument arising out of legislation, surely, with a complicated Bill such as this, Opposition Members should have a reasonable amount of time in which to take advice. Not only Opposition Members but local authority associations and individual local councils need to take advice to determine whether some hidden implications may cause difficulties for them.
4.45 pm
At the moment, all we have is the Secretary of State's statement that there is nothing unacceptable in the amendments. Of course, his record is not good. The courts have ruled against him four times. It appears that, on those occasions, he got the advice wrong. He did not quite understand the legislation. Of course, he knew about the problems with this legislation, so he told us, several months before he confided in the House and told us that


we needed legislation. Part of the blame for the rush is his. It is his fault for not bringing forward the legislation and not telling the House about it earlier.
There are unprecedented powers in the legislation. On this occasion, the Secretary of State says that we are legislating not only to allow judges to interpret the legislation but to stop judges interpreting the legislation. The Secretary of State may be able to tell us that there are many precedents for this, but I have been told by one or two of my hon. Friends that we must refer back several centuries to find an occasion on which a Minister introduced legislation to disfranchise judges. A few people would say that we do not want judges interfering in interpreting legislation. I should have thought that the Conservative party could see only too clearly the dangers of legislating judges out of their role in interpreting the law. It seems to be extremely dangerous.
That is a totally new element in the legislation as far as rates are concerned. It is one of the reasons why we should give this legislation much more adequate scrutiny than will be possible if the Government insist on rushing it through, taking only a fortnight from the time of the Second Reading to the point at which the Government hope that it will leave the House and head for the other place.
The Government have a majority and, more or less, can steamroll anything through the House of Commons. I suggest that the Government should think carefully about steamrolling tactics. They have encouraged people in the other place to realise that there are constitutional problems and to spend much more time examining legislation. If the Government do not take notice of the dilatory motion today, Members of the other place will be tempted to take a long time to scrutinise the legislation. They have a duty not only to scrutinise those parts of the Bill that re-establish the status quo—as everyone believed it was—but to look at those parts that introduce new principles such as opting judges out of interpreting legislation.
The other place should seriously consider amending the legislation so that it merely re-establish the status quo, and take out these new powers and insist that they are properly and fully scrutinised within the normal procedures of the House. That involves about eight or nine months, from Second Reading to a proper Committee stage, to a Report stage and to the remaining proceedings.
I strongly urge the Committee to support this procedural motion and to allow the proper consultation necessary to pass good legislation.

Mr. Terry Davis: I support this motion for two reasons, but, first, I press the Secretary of State on one specific point. The Secretary of State, during his response to the remarks of my hon. Friend the Member for Copeland (Dr. Cunningham), told the Committee that on Thursday he informed my hon. Friend that it was the Government's intention to table a number of amendments to the Bill. If the Secretary of State says that he gave that information to my hon. Friend, I am sure that my right hon. and hon. Friends and I will accept his assurance. I suspect that the Secretary of State chooses his words with care. When he told the House that he said to my hon. Friend that it was his intention to table a number of amendments, I asked him to tell us whether those were the words he used to my hon. Friend. Indeed, did the Secretary of State say that he would table a number of amendments or did he give the impression to my hon.

Friend that it would be only a few amendments? There is a difference between, on the one hand, tabling three, four or five amendments and, on the other hand, tabling 38 amendments and new clauses last Thursday evening. The Secretary of State owes the Committee a full explanation. He should be more candid with us.
I refer to the reasons for supporting the motion moved by my hon. Friend the Member for Copeland. Copies of these amendments and new clauses were not available until Friday afternoon. I agree with the hon. Member for Eastbourne (Mr. Gow) that it is in order for amendments to be tabled on a Thursday evening, to appear on the Order Paper on Friday morning and to he debated on Monday. There is no disagreement on that point. The hon. Member for Eastbourne is absolutely correct, hut there was a difference in the procedure last Friday.
For whatever reason, the amendments were not available on Friday morning. On several occasions, I went to the Vote Office for the latest issue of amendments to the Bill. I take a particular interest in the Bill because it affects the city of Birmingham, and I represent part of the city of Birmingham. I took part in the Second Reading debate. I was interested to discover what amendments were to be tabled. Indeed, I tabled an amendment on Thursday evening, and I wanted to check that it was printed accurately. The Notice Paper was not available on Friday morning. I went to the Vote Office several times and asked for it. My hon. Friends told me that the Notice Paper became available about one o'clock or slightly thereafter, approximately the time at which the House was about to divide on the private Member's Bill.
It was not possible for Opposition Members to consult their advisers, particularly the officers employed by the local authorities, in their constituencies on Friday. It was only this morning that we saw the large number of amendments that had been tabled by the Government. It is an argument not about whether it is in order but about whether it is appropriate and right for the Committee to debate amendments of such scale and significance on a Monday when they were not available at a reasonable time on the previous Friday. I ask the hon. Member for Eastbourne, whose approach is usually fair, to reconsider his earlier remarks. He asked whether this was in order. There is no argument about that. Of course it is in order. But is it right to proceed in this way? That is why my hon. Friend the Member for Copeland did not raise it as a point of order. Instead he has moved a procedural motion that we should now report progress so that these amendments can be considered by both sides of the Committee and given the scrutiny that they deserve.
I support my hon. Friend's motion because the scrutiny of this Bill is especially important as it has been brought before the Committee by this Secretary of State. On 16 December 1986 he complained that the Opposition should have picked up the loopholes in legislation. He said that they should have scrutinised the Local Government, Planning and Land Act 1980 more carefully. It does not lie in the mouth of this Secretary of State, therefore, to rush legislation through the House of Commons and subsequently to complain if there are further loopholes. On 16 December 1986 the Secretary of State said:
The hon. Gentleman had some fun with his adjectives, but let me ask him what scrutiny he gave to the 1980—
and then he was interrupted. He continued:
It takes me to do not only my job but the Opposition's job in pointing out what Parliament failed to stop in 1980.


Will a future Secretary of State come to the House in six or seven years' time and complain that this Bill was not adequately scrutinised in 1987? Supported as usual in his vocal, articulate and vociferous manner by the hon. Member for Eastbourne, the Secretary of State complained that the Opposition had not picked up the deficiencies in the previous legislation. He said:
Every hon. Member is in breach of the law in this regard for not having drawn attention to the deficiencies in the system."—[Official Report, 16 December 1986; Vol. 107, c. 1053–1057.]
We do not intend to be told in six or seven years' time that we have not drawn attention to the deficiencies in this new system. The amendments and clauses have been tabled by the Government at a very late stage. I ask the hon. Member for Eastbourne to withdraw his remarks. Usually he is very fair. Why is he seeking to obfuscate the issue in this way?
I make no secret of my views about the Bill. It is a shabby Bill, but it is not necessary for the Government to behave in such a shabby way.

Mr. Jack Straw: The Secretary of State seeks to oppose the motion. Most hon. Members believe that he must do a great deal more explaining before he is able to convince the Committee of the appropriateness of proceeding with the debate this afternoon. I hope that we shall have a proper reply from him before there is a vote on the motion.

Mr. Ridley: indicated dissent.

Mr. Straw: The Secretary of State has no intention of replying to the debate, Mr. Walker. Are we to anticipate a reply from the Minister of State, or is this another example of the way in which this Government behave—that they never seek to reply to debates? Is there to be a reply by the Leader of the House? It is most unusual for there to be a procedural motion but no ministerial reply. The Secretary of State told us that the amendments that were put down on Friday involve no substantial change to the Bill and that therefore we could debate this matter.

Mr. Spearing: On a point of order, Mr. Walker. My hon. Friend the Member for Blackburn (Mr. Straw) asked a rhetorical question concerning a ministerial reply to the motion. Can you help me? In Committee it is usual for there to be a reply from a Minister or for there to be a specific intimation by the Minister that he does not intend to reply. Is it possible to discover that now? Unless we do so now, my hon. Friend may be talking to thin air. Are we to have a reply from the Minister?

The Chairman: As the hon. Gentleman well knows, that is not a matter for me. However, my impression is that from a sedentary position the Secretary of State suggested that he had no intention of responding to the debate.

Mr. Straw: The Committee will note—[HON. MEMBERS: "Shameful."] Yes, it is shameful. The Committee will draw the conclusion that the Secretary of State accepts that the case lies with us. Since this is the Committee stage, I know that you will confirm, Mr. Walker, that the Secretary of State does not need the leave of the Committee to speak again. It is a gross abuse of the accepted conventions of the Committee for there to be a debate, albeit one that the Secretary of State did not wish to have, and for him to refuse to reply to it. If the Secretary

of State were to turn round and look at the faces of his hon. Friends, he would see that he is picking up no brownie points by treating the Committee in this arrogant way.
In support of the arrogant way in which he has behaved, the Secretary of State said that the amendments involve no substantial change to the Bill. There are four reasons why we should not accept the Secretary of State's word. First, as my hon. Friend the Member for Copeland (Dr. Cunningham) made clear, the Opposition were given no notice of the nature of these amendments. I am glad that the Secretary of State admitted that during the discussions through the usual channels no details of the amendments were given and that the clear impression was given that there would be a few technical amendments of the kind that have always been accepted on any Bill.
The second reason for not accepting the Secretary of State's word that there is nothing in these amendments is that he told us today that long and complex amendments to existing clauses were tabled only last Friday and that two clauses have been replaced. Given the notice that the Opposition have had so far, it is impossible for the Committee properly to decide in what respect those clauses have been amended and to divine their complexity. Even if the Opposition could accept the good faith of Ministers, we know to our cost that undertakings given by Ministers about the nature of legal provisions are of no value after a Bill has become law. Some of us dealt with the Local Government Bill. We should not be in this position if ministerial undertakings as to the meaning of legislation had turned out to be correct. Some of us remember that only 18 months ago Ministers gave undertakings about the way in which the Local Government Bill would impact on the information practices of local authorities, but its impact has been wholly different and restrictive.
The third reason why we cannot accept the Secretary of State's word is that we have been here before and discovered that his word cannot be relied upon. On 16 December the Secretary of State told the House:
The Bill is designed to make no changes in policy, but as far as possible to apply existing policy within a tight timetable.
In answer to an intervention from the previous Secretary of State for the Environment, the right hon. Member for Wanstead and Woodford (Mr. Jenkin), he said:
We are merely validating the past and putting right for the future the position that the whole House thought obtained."—[Official Report, 16 December 1986; Vol. 107, c. 1051–54.]
We were told that that was all that the Bill would contain. However, we find that the Bill contains major policy changes. The hon. Member for Eastbourne was at least right about that, but what he said was wholly different from what the Secretary of State told us: that authorities are retrospectively penalised because £38 million is to be taken away from 12 authorities, including Birmingham and Cambridge; that the appeal procedure in the Rates Act 1984, which was laid down in this House by Conservative Members only three years ago, is to be abandoned for this year; and, above all, that by this Bill the Secretary of State seeks to put himself wholly above the law.
I do not know whether Conservative Members have read clause 4(6) or clause 6(4). I ask them to reflect on the


words used. The Secretary of State gives himself the power to provide that decisions which he makes under clause 6(4) shall have effect
notwithstanding any decision of a court (whether before or after the passing of this Act) purporting to have a contrary effect.
Conservative Members are learned in the law. Can they think of any Act in peacetime in which a Secretary of State has sought to give himself immunity from the law in this way?

5 pm

Mr. Richard Hickmet: The hon. Gentleman poses a question on interpretation of the Act and the validity of particular sections. What Conservative Members feel about the Opposition's tactics in relation to the motion is this. Of the 20 authorities that have been ratecapped or are to be ratecapped, 19 are controlled by the Labour party, and one by the alliance parties, affecting about 5·5 million people. The people who are resident in those local authority areas look to the House and the Bill for protection. The Opposition are endeavouring to divert criticism of those local authorities for the spending, social and housing policies that they have pursued. That is the motive of the debate this afternoon.

Mr. Straw: By his silence on the point the hon. Gentleman has confirmed that there is no precedent in peacetime for a Secretary of State placing himself above the law in this way. If the hon. Gentleman were on the Opposition Benches, he and his hon. Friends would be rightly ferocious in their attack upon any Labour Minister seeking to set himself above the law. If the hon. Gentleman applies himself to the clause, he will see that it is not just a matter of the Secretary of State validating past acts—that is provided for by clause 4(1), and that we accept within the framework of the Bill. Having validated past acts, the Secretary of State then seeks to place himself wholly above the law, immune from any possibility of court action.
In our judgment, there is no precedent in peacetime for such a procedure since the Bill of Rights in 1688. The purpose of that constitutional settlement was to place Ministers under the control and supervision of the High Court of Parliament. This Bill sets an extremely dangerous precedent, involving a fundamental change of policy, which was not hinted at when the Secretary of State came before the House on 16 December.
The fourth reason why we cannot accept the Secretary of State's explanation is that it is patent that he, even if he had good faith, has no grip on or grasp of local government finance or the Bill. In answer to my hon. Friend the Member for Bootle (Mr. Roberts), the Secretary of State said:
The hon. Gentleman is totally wrong. I am the only person who is quite certain what the law is."—[Official Report, 16 December 1986; Vol. 107, c. 1055.]
For the Secretary of State the law is a moving target.
We have been in a situation where the Secretary of State presented a Bill, apparently to clarify and state the law as he says everybody knew that it once was. He then sought to table amendments to clauses 10 and 11. Now he wants to delete them. Today, to assist the House, we have been provided with notes on clauses 10 and 11, which are now to be deleted. I am grateful to the Secretary of State for providing us with notes on clauses that will not exist, but he has failed to provide us with notes on schedules that will replace those clauses that will no longer exist.
The Secretary of State is not directly responsible for the initial chaos into which local government finance has been plunged by successive Conservative Secretaries of State, but he has made the situation worse.
The hon. Member for Eastbourne said that standard procedures had been followed. That is not correct, because this is a technical Bill. Every other technical local government finance Bill, as with the technical parts of every finance Bill, is debated upstairs. It is ludicrous for a Committee of the whole House to debate the minutiae of local government finance. Were the Bill debated upstairs, Ministers would give notice of their intention to amend a Bill in this way, and many more than two days would have been allowed.
The amendments are substantial. The definition of expenditure is changed by amendment No. 6; the way in which principles of accounting are applied to local authorities is changed by amendment No. 153; information requirements for local authorities are changed by one amendment to the schedule. There is a whole new schedule that changes the rate support grant procedures and abrogates the requirements on the Secretary of State to consult local authorities. It disregards other matters. There is a half page on the ways in which the teachers' pay settlement is to be dealt with. The Secretary of State says there is nothing new in this, but there are new matters and we need more than half a working day to take advice upon them.
In answer to my hon. Friend the Member for Copeland, the Secretary of State admitted that he has known about this farrago since last September. He now comes to the House and says that the matter is urgent. If he had had any sensibility to the views of the House, and any wish to have this matter dealt with urgently and expeditiously, he would have come to us when he got the Attorney-General's advice in October and told us that there was a problem, that he wanted to put it right, but did not want to change the law in any substantive way and asked us to agree a procedure for dealing with this. As my hon. Friend the Member for Copeland has made clear, we would have agreed to look at the draft and the Bill could have gone through on the nod without any of this.
Instead, the Secretary of State has sued the excuse of legal defects to ambush the House into accepting new and wholly unacceptable changes to local government finance. At the latest stage he has tried to ambush us again. It is unacceptable; this ambush cannot and must not work. I support the motion.

Several Hon. Members: rose——

The Chairman: The Committee has had a fair run at this and the issue is very clear. I should have thought that the Committee was in a position to reach a conclusion. If hon. Members persist, I have no option but to call them, but I hope that they will bear in mind what I have said.

Mr. Spearing: The powerful points made by my hon. Friend the Member for Blackburn (Mr. Shaw) have emphasised the behaviour of the Secretary of State, who I hope will not depart because I have personal criticisms to make of him. It is quite clear that in every respect his behaviour over the Bill has shown his contempt of parliamentary procedures.
I thought that all hon. Members believed in parliamentary democracy; that it was almost a sine qua non of becoming a Member of this place. How the right


hon. Gentleman can go to the electors of Cirencester and Tewkesbury at the next election and ask to be returned as their Member of Parliament when he has so treated all Members of Parliament—there were criticisms from others on Second Reading—defies all logic.
The reason for the motion, Mr. Walker, which you have allowed to be put, illustrates the abuse of the place by the Secretary of State. A dilatory motion is a safety valve. The Chair will not allow a dilatory motion to be moved unless there has been an irregularity. That is in the Standing Orders—you will correct me if I am wrong, Mr. Walker—but there has been a hiccup. There is an overwhelming case for interrupting the normal business of the House to allow debate on the Adjournment so that dissatisfaction can be aired. The fact that you, Mr. Walker, have permitted the debate is a sign that in your judgment, and indeed on any objective test, there has been a parliamentary irregularity.
Conservative Members have no need to smile. Before the Bill was published, two or three deputations from the London borough of Newham had discussions in good faith with the Secretary of State. The Bill destroys all those discussions and everything that went on in a proper manner. It is because of that sort of distrust that the motion has been moved tonight.
I asked six questions during a speech made almost a week ago to the hour. I asked five factual questions and one of opinion to be answered that night by the Under-Secretary of State for Scotland, and, if he could not do so then, to be answered by the end of last week. No letter was received. This morning, I telephoned the Secretary of State's Private Office and half an hour ago I received a letter from the Minister for Local Government. Does the hon. Gentleman—I ask him because he still may have a chance to sum up—think that that is correct parliamentary procedure since five of my questions related to matters of fact, no opinion? They related to the London borough of Newham, which stands to lose £33 million as a result of the Bill and £6 million, pro rata, from the education budget for next year.
I want to talk to my town hall officials about the new amendments. I want to ask them about the estimates in the Minister's letter. Because of the timing and the way in which the Government have behaved, I have not had the opportunity to do so. That is why you, Mr. Walker, are justified in letting us debate the matter.
The Government's behaviour in respect of local government is a matter for debate on the Floor of the House. We think that it is pretty bad. But the Government's provable behaviour in respect of this legislation is completely unparliamentary and smacks of totalitarian attitudes. It is unworthy of any person who calls himself a democrat.

Mr. Bill Michie: I, too, shall be brief as I agree with all the points made by my hon. Friends in support of the motion. The reasons have been put fairly clearly.
I want to talk about consultation. Some of my hon. Friends have said that the Secretary of State has treated hon. Members and parliamentary procedure with contempt. I am worried about that, but I am even more worried by the cynical disregard for the democratic process and for local authority officers and councilors

who have come to see the Secretary of State or his Ministers in the past few months. Some delegations have been completely ignored. No difference seems to have been made by all the facts that have been laid before the Secretary of State and his Ministers. The Minister listened keenly to the delegation from Sheffield while the Bill was being printed across the road. So much for the democratic process, which is being exploited with cynical disregard.
5.15 pm
I do not believe that the Secretary of State understands the Bill's implications. If he does understand them, he obviously dislikes local government so much that he is prepared to push it through despite the damage that it is likely to do. The Government should respect the crucial work of local government. I still maintain that local government is the bedrock of democracy in Britain. I still maintain that it actively expresses, yearly, the views of Britain's electorate. I still maintain that it protects local people, and, in particular, poor people, from the abuses of Government, even though the Government seem to accuse local government of abuses. I still maintain that without the safety valve of local government there would be even more disillusionment about parliamentary democracy.
Therefore, more time is needed for consultation, not just so that we can learn, but so that the Secretary of State can learn the damage that is likely to be done to local government if the Bill goes through unscathed. We need that extra time and I hope that we shall win the vote tonight in order to obtain that extra time for the sake of democracy and local government generally.

Mr. Dobson: Whatever functions I or any other hon. Member may attempt to carry out in the House, our primary function is to attempt to represent and protect the interests of the people who elected us. This debate is not some shallow procedural wrangle. It is about the capacity of hon. Members, at least on the Labour Benches, to go about their proper business of trying to discover what impact the Bill's proposals and its amendments are likely to have on the lives of the people whom we were elected to represent. In the short time that has been available to us it has been impossible for any of us to find out what the Bill's impact is likely to be.
If I think of my constituency, with the shivering streets in which the people whom I represent are living, I do not know what the impact of these measures will be. I suspect that they will mean reductions in meals on wheels for old and handicapped people. I suspect that there will be less money for luncheon clubs for old and handicapped people. I suspect that less money will be available for trying to cope with the thousands of homeless people in my constituency. But I do not know, because I have not had time to look at the proposals in detail and to consult the people who can advise me. As an inner London Member, I to some extent have to represent, or try to represent, in the House, the interest of the children, young people and adults who depend on the Inner London education authority for their education. That authority worked hard and quickly to brief me on what the Bill's proposals may do to its ability to provide an education for my children, my neighbours' children and my constituents' children, but it has not yet been able to provide a briefing on the impact of the Government's amendments and new schedule.
It is impossible for me properly to discharge my primary duty as a Member of Parliament to scrutinise the


legislation and to try to measure its impact on the people whom I try, inadequately, to represent. There are people who say that the shouting at Prime Minister's Question Time, or various yah-booing activities in this place, bring the House into disrepute. That is trivial in comparison with the way that this sort of cavalier treatment of the House brings it into disrepute. We were sent here to represent our constituents. One of our duties is to scrutinise legislation and the Government's proposition today, and their opposition to the motion, is guaranteed to bring the House into disrepute. We shall be a disreputable body if we let this go through.
I say to the few Conservative Members who have bothered to listen to any of the debate that when, after the next general election, it is their turn to sit on the Opposition Benches, they should not moan to us if they think that we are pushing things through too quickly. If Conservative Members vote today to treat us in this way—[Interruption.] The hon. Member for Hornsey and Wood Green (Sir H. Rossi) says that this has been done before. Although he is a lawyer, he apparently does not realise that there has never been an occasion when the House has been asked to pass a Bill which, in advance, exempted a Secretary of State from scrutiny in the High Court. That has not been done before and we do not want it done now. Conservative Members should remember that they may live and learn.

Mr. Laurie Pavitt: The two main thrusts of the argument have been adequately and eloquently covered by my hon. Friends. As we all know, scrutiny for us means consultation with people more expert than we on legal matters. That has been impossible on these amendments. The Committee will know that for the past 12 months I have sought, to the best of my ability, to do my duty by the London borough of Brent, part of which I have the honour to represent. That borough is profoundly affected, not only by the Bill, but by the latest lot of amendments. For the first time in 28 years, I am unable to have the expert advice that I need on amendments.
Like my hon. Friend the Member for Birmingham, Hodge Hill (Mr. Davis), I tried to get copies of the amendments on Friday, but could not get them until this morning. As always, I have been in close contact with the London borough of Brent and in particular on this matter with the director of finance. I sent him a copy of Hansard containing the debate on the Second Reading and a copy of the Bill and received in reply a three-page letter, which I studied on Friday. However, the amendments have made half of his points out of date. I cannot adequately do the job I was sent to do because I cannot have the information that I need. We have talked about a north-south divide, but the divide is between the different parts of government—between the Government on one side and local government on the other. This debate represents that division at its most acute.
The right hon. Member for Cambridgshire, South-East (Mr. Pym) was sacked from the Government for making a true and parliamentary statement—that a large Government majority is unhealthy for parliamentary democracy. We know that we cannot halt these proceedings because the Government will whip the vote. As a result, we shall not have adequate time to take advice on the amendments. The Government should realise that, urgent and important though this matter may be, the delay

would be for 48 hours only. The motion would give us sufficient time to consult our local authorities and return to the debate on Wednesday.
The Government's programme is a travesty of parliamentary procedure. This is a new low in the way in which an arrogant Government are seeking to bulldoze their measures through Parliament, irrespective of the rights of constituents and affected bodies. We should be able to debate these matters in the time-honoured way, with time for full consultation. If we followed that way, we would have a much better Bill.

Mr. Michael Hancock: I apologise to the Secretary of State for missing his speech, but I was talking to the treasurer of Hampshire county council, of which I am a member, to get some points from him. He was explaining that, as a result of the short time scale, he is finding it difficult to make comments to all hon. Members representing Hampshire, as is the normal procedure.
There is an irony in the debate. On page 2 are some important words about which the Minister must have thought carefully when he formulated the Bill. They are "proper practices be observed". Hon. Members have eloquently explained what they consider to be the proper practices when it comes to giving us the opportunity to discuss properly and fully the implications of the legislation before us. The Government's amendments were tabled just before the weekend, giving little time for them to be examined in depth and for the associations and local authorities that will be affected to make a proper response. There is little time for hon. Members on both sides of the Committee to be properly briefed on the implications not only of the Bill but of the amendments which, as has been said, will have a fundamental effect on what will happen. That is a dereliction of responsibility by the Secretary of State.
There must be some semblance of fair play in this place. If it cannot be seen to operate fairly, giving all hon. Members equal opportunity to have full and detailed knowledge of what the amendments mean and what their implications will be, that is a sad reflection on the state of democracy in our country. All hon. Members who have spoken from the Opposition Benches have put across that message loud and clear. I hope that, even now, the Secretary of State will tell us what he feels on this important point.

Question put:—

Division No. 56]
[5.25 pm


AYES


Abse, Leo
Buchan, Norman


Alton, David
Caborn, Richard


Anderson, Donald
Callaghan, Rt Hon J.


Archer, Rt Hon Peter
Callaghan, Jim (Heyw'd &amp; M)


Ashton, Joe
Campbell, Ian


Atkinson, N. (Tottenham)
Canavan, Dennis


Banks, Tony (Newham NW)
Carter-Jones, Lewis


Barron, Kevin
Cartwright, John


Beckett, Mrs Margaret
Clark, Dr David (S Shields)


Bell, Stuart
Clarke, Thomas


Bann, Rt Hon Tony
Clelland, David Gordon


Bennett, A. (Dent'n &amp; Red'sh)
Clwyd, Mrs Ann


Bermingham, Gerald
Cocks, Rt Hon M. (Bristol S)


Bidwell, Sydney
Coleman, Donald


Blair, Anthony
Conlan, Bernard


Bray, Dr Jeremy
Cook, Frank (Stockton North)


Brown, Gordon (D'f'mline E)
Cook, Robin F. (Livingston)


Brown, R. (N'c'tle-u-Tyne N)
Corbett, Robin


Bruce, Malcolm
Cox, Thomas (Tooting)






Crowther, Stan
Madden, Max


Cunliffe, Lawrence
Marek, Dr John


Cunningham, Dr John
Marshall, David (Shettleston)


Dalyell, Tam
Martin, Michael


Davies, Ronald (Caerphilly)
Mason, Rt Hon Roy


Davis, Terry (B'ham, H'ge H'l)
Maxton, John


Deakins, Eric
Meacher, Michael


Dobson, Frank
Meadowcroft, Michael


Dormand, Jack
Michie, William


Douglas, Dick
Mikardo, Ian


Dubs, Alfred
Mitchell, Austin (G't Grimsby)


Dunwoody, Hon Mrs G.
Morris, Rt Hon J. (Aberavon)


Eadie, Alex
O'Brien, William


Eastham, Ken
O'Neill, Martin


Evans, John (St. Helens N)
Orme, Rt Hon Stanley


Fatchett, Derek
Park, George


Field, Frank (Birkenhead)
Patchett, Terry


Fields, T. (L'pool Broad Gn)
Pavitt, Laurie


Fisher, Mark
Pendry, Tom


Flannery, Martin
Powell, Raymond (Ogmore)


Foot, Rt Hon Michael
Prescott, John


Foster, Derek
Radice, Giles


Fraser, J. (Norwood)
Randall, Stuart


Freud, Clement
Raynsford, Nick


George, Bruce
Redmond, Martin


Gilbert, Rt Hon Dr John
Rees, Rt Hon M. (Leeds S)


Godman, Dr Norman
Richardson, Ms Jo


Golding, Mrs Llin
Roberts, Allan (Bootle)


Gould, Bryan
Roberts, Ernest (Hackney N)


Hancock, Michael
Rogers, Allan


Hardy, Peter
Rooker, J. W.


Harrison, Rt Hon Walter
Ross, Ernest (Dundee W)


Hart, Rt Hon Dame Judith
Ross, Stephen (Isle of Wight)


Hattersley, Rt Hon Roy
Rowlands, Ted


Haynes, Frank
Sedgemore, Brian


Heffer, Eric S.
Sheerman, Barry


Hogg, N. (C'nauld &amp; Kilsyth)
Sheldon, Rt Hon R.


Holland, Stuart (Vauxhall)
Shore, Rt Hon Peter


Home Robertson, John
Short, Ms Clare (Ladywood)


Howell, Rt Hon D. (S'heath)
Short, Mrs R.(W'hampt'n NE)


Howells, Geraint
Silkin, Rt Hon J.


Hoyle, Douglas
Skinner, Dennis


Hughes, Robert (Aberdeen N)
Smith, C.(Isl'ton S &amp; F'bury)


Hughes, Roy (Newport East)
Smith, Rt Hon J. (M'ds E)


Hughes, Sean (Knowsley S)
Snape, Peter


Hughes, Simon (Southwark)
Soley, Clive


Janner, Hon Greville
Spearing, Nigel


Jenkins, Rt Hon Roy (Hillh'd)
Steel, Rt Hon David


John, Brynmor
Straw, Jack


Johnston, Sir Russell
Thomas, Dafydd (Merioneth)


Jones, Barry (Alyn &amp; Deeside)
Thomas, Dr R. (Carmarthen)


Kaufman, Rt Hon Gerald
Thompson, J. (Wansbeck)


Kennedy, Charles
Thorne, Stan (Preston)


Lambie, David
Wainwright, R.


Lamond, James
Wallace, James


Leadbitter, Ted
Wardell, Gareth (Gower)


Leighton, Ronald
Welsh, Michael


Lewis, Terence (Worsley)
White, James


Litherland, Robert
Wigley, Dafydd


Livsey, Richard
Williams, Rt Hon A.


Lloyd, Tony (Stretford)
Wilson, Gordon


Lofthouse, Geoffrey
Winnick, David


Loyden, Edward
Woodall, Alec


McCartney, Hugh
Wrigglesworth, Ian


McDonald, Dr Oonagh
Young, David (Bolton SE)


McKay, Allen (Penistone)



McNamara, Kevin
Tellers for the Ayes:


McTaggart, Robert
Mr. James Hamilton and


McWilliam, John
Mr. Don Dixon.


NOES


Aitken, Jonathan
Bowden, Gerald (Dulwich)


Alexander, Richard
Boyson, Dr Rhodes


Ancram, Michael
Brandon-Bravo, Martin


Atkins, Rt Hon Sir H.
Brown, M. (Brigg &amp; Cl'thpes)


Best, Keith
Browne, John


Biffen, Rt Hon John
Bruinvels, Peter


Biggs-Davison, Sir John
Carlisle, Kenneth (Lincoln)


Body, Sir Richard
Chope, Christopher


Bottomley, Peter
Clark, Sir W. (Croydon S)





Clarke, Rt Hon K. (Rushcliffe)
Knight, Dame Jill (Edgbaston)


Cope, John
Knowles, Michael


Corrie, John
Knox, David


Dickens, Geoffrey
Latham, Michael


Dorrell, Stephen
Lawler, Geoffrey


Douglas-Hamilton, Lord J.
Lawrence, Ivan


Dykes, Hugh
Lee, John (Pendle)


Eyre, Sir Reginald
Lennox-Boyd, Hon Mark


Fallon, Michael
Lester, Jim


Farr, Sir John
Lewis, Sir Kenneth (Stamf'd)


Favell, Anthony
Lightbown, David


Fenner, Dame Peggy
Lilley, Peter


Finsberg, Sir Geoffrey
Lloyd, Sir Ian (Havant)


Fletcher, Sir Alexander
Lloyd, Peter (Fareham)


Fookes, Miss Janet
Lord, Michael


Forth, Eric
Luce, Rt Hon Richard


Fox, Sir Marcus
McCrindle, Robert


Franks, Cecil
Macfarlane, Neil


Fraser, Peter (Angus East)
Maclean, David John


Freeman, Roger
McLoughlin, Patrick


Fry, Peter
McNair-Wilson, P. (New F'st)


Gale, Roger
McQuarrie, Albert


Galley, Roy
Madel, David


Gardiner, George (Reigate)
Malins, Humfrey


Garel-Jones, Tristan
Malone, Gerald


Glyn, Dr Alan
Maples, John


Goodhart, Sir Philip
Marlow, Antony


Goodlad, Alastair
Marshall, Michael (Arundel)


Gow, Ian
Mather, Sir Carol


Gower, Sir Raymond
Maude, Hon Francis


Grant, Sir Anthony
Maxwell-Hyslop, Robin


Greenway, Harry
Mayhew, Sir Patrick


Griffiths, Peter (Portsm'th N)
Mellor, David


Grist, Ian
Merchant, Piers


Ground, Patrick
Meyer, Sir Anthony


Grylls, Michael
Mills, Iain (Meriden)


Hamilton, Hon A. (Epsom)
Mills, Sir Peter (West Devon)


Hamilton, Neil (Tatton)
Moate, Roger


Hampson, Dr Keith
Monro, Sir Hector


Hanley, Jeremy
Montgomery, Sir Fergus


Hannam, John
Morris, M. (N'hampton S)


Hargreaves, Kenneth
Morrison, Hon P. (Chester)


Harris, David
Moynihan, Hon C.


Haselhurst, Alan
Mudd, David


Havers, Rt Hon Sir Michael
Nelson, Anthony


Hawkins, C. (High Peak)
Neubert, Michael


Hawkins, Sir Paul (N'folk SW)
Nicholls, Patrick


Hawksley, Warren
Norris, Steven


Hayes, J.
Onslow, Cranley


Hayhoe, Rt Hon Sir Barney
Oppenheim, Phillip


Hayward, Robert
Ottaway, Richard


Heathcoat-Amory, David
Page, Sir John (Harrow W)


Henderson, Barry
Page, Richard (Herts SW)


Heseltine, Rt Hon Michael
Patten, J. (Oxf W &amp; Abgdn)


Hickmet, Richard
Pattie, Rt Hon Geoffrey


Hicks, Robert
Porter, Barry


Higgins, Rt Hon Terence L.
Powell, William (Corby)


Hind, Kenneth
Price, Sir David


Hirst, Michael
Proctor, K. Harvey


Holland, Sir Philip (Gedling)
Raffan, Keith


Holt, Richard
Raison, Rt Hon Timothy


Hordern, Sir Peter
Rathbone, Tim


Howard, Michael
Rhodes James, Robert


Howarth, Alan (Stratf'd-on-A)
Rhys Williams, Sir Brandon


Howarth, Gerald (Cannock)
Ridley, Rt Hon Nicholas


Howell, Ralph (Norfolk, N)
Ridsdale, Sir Julian


Hubbard-Miles, Peter
Rippon, Rt Hon Geoffrey


Hunt, David (Wirral W)
Roberts, Wyn (Conwy)


Hunt, John (Ravensbourne)
Robinson, Mark (N'port W)


Hunter, Andrew
Roe, Mrs Marion


Irving, Charles
Rossi, Sir Hugh


Jackson, Robert
Rost, Peter


Jessel, Toby
Rowe, Andrew


Johnson Smith, Sir Geoffrey
Ryder, Richard


Jones, Gwilym (Cardiff N)
Sackville, Hon Thomas


Jones, Robert (Herts W)
Sainsbury, Hon Timothy


Joseph, Rt Hon Sir Keith
Sayeed, Jonathan


Kershaw, Sir Anthony
Shaw, Giles (Pudsey)


Key, Robert
Shaw, Sir Michael (Scarb')


King, Roger (B'ham N'field)
Shelton, William (Streatham)






Shepherd, Richard (Aldridge)
Thorne, Neil (Ilford S)


Shersby, Michael
Thurnham, Peter


Silvester, Fred
Townend, John (Bridlington)


Skeet, Sir Trevor
Townsend, Cyril D. (B'heath)


Smith, Sir Dudley (Warwick)
Tracey, Richard


Smith, Tim (Beaconsfield)
Twinn, Dr Ian


Soames, Hon Nicholas
van Straubenzee, Sir W.


Speed, Keith
Vaughan, Sir Gerard


Spencer, Derek
Waddington, Rt Hon David


Spicer, Jim (Dorset W)
Wakeham, Rt Hon John


Spicer, Michael (S Worcs)
Waldegrave, Hon William


Squire, Robin
Walker, Bill (T'side N)


Stanley, Rt Hon John
Waller, Gary


Steen, Anthony
Ward, John


Stern, Michael
Wardle, C. (Bexhill)


Stevens, Lewis (Nuneaton)
Watts, John


Stewart, Allan (Eastwood)
Wells, Bowen (Hertford)


Stewart, Andrew (Sherwood)
Wells, Sir John (Maidstone)


Stokes, John
Wheeler, John


Stradling Thomas, Sir John
Whitney, Raymond


Sumberg, David
Wilkinson, John


Tapsell, Sir Peter
Wolfson, Mark


Taylor, John (Solihull)
Yeo, Tim


Taylor, Teddy (S'end E)
Young, Sir George (Acton)


Temple-Morris, Peter
Younger, Rt Hon George


Terlezki, Stefan



Thomas, Rt Hon Peter
Tellers for the Noes:


Thompson, Donald (Calder V)
Mr. Tony Durant and


Thompson, Patrick (N'ich N)
Mr. Michael Portillo.

Question accordingly negatived.

Motion made, and Question put,
That the Bill be considered in the following order: Clause 1, Schedule 1, Clauses 2 to 7, Schedule 2, Clauses 8 to 12, Schedules 3 and 4, Clauses 13 to 17, new Clauses, and new Schedules—[Mr. Ridley.]

The Committee divided: Ayes 233, Noes 175.

Question accordingly agreed to.

Clause 1

RATE FUND REVENUE ACCOUNTS

Dr. Cunningham: I beg to move amendment No. 2A, in page 1, line 16, at end insert—
(1A) 'Subsection 1 of this section shall come into effect after the making of an Order by the Secretary of State, and no such Order shall come into effect until any hearings in progress at the date of introduction of this Act (whether expedited or otherwise) have been completed in the courts in respect of applications for judicial review brought against the Secretary of State regarding the Rate Support Grant settlement for 1986–87 or previous financial years.'.

The Second Deputy Chairman of Ways and Means (Sir Paul Dean): With this it will be convenient to take the following amendments: No. 2B, in page 1, line 16, at end insert—
'(1A) Subsection 1 of this section shall come into effect after the making of an Order by the Secretary of State. and no such Order shall come into effect until after the laying before Parliament by the Secretary of State of a report setting out the dates, and any other details which he may consider relevant, of the legal advice received by him prior to the introduction of this Act with respect to the legal interpretation of "relevant" and "total" expenditure for Rate Support Grant purposes.'.
No. 81, in clause 4, page 5, line 5, leave out subsection (6).
No. 83, in page 5, line 6, leave out 'whether'.
No. 84, in page 5, line 6, leave out 'or after'.
No. 85, in page 5, line 7, at end add
'save those decisions of a court in respect of litigation before the courts on 12th January.'.
No. 100, in clause 6, line 1, leave out subsection (4).
No. 102, in page 6, line 2, leave out 'whether'.
No. 103, in page 6, line 2, leave out 'or after'.
No. 104, in page 6, line 3, at end add
'save those decisions of a court in respect of litigation before the courts on 12th January 1987'.

Dr. Cunningham: This large group of amendments deals with the provisions in the Bill that seek to give the Secretary of State various legal immunities, that seek also to prevent legal challenges being pursued against the Secretary of State, as they have been in the past, and with matters associated with those general points.
The first group of amendments would delay the implementation of the Bill, pending the making of orders in the House of Commons. However, the Government's policies on local government finance and on the law governing it are now in such a complete shambles after almost eight years of legislative and administrative change, and are so confused and inexplicable—even from the Treasury Bench—that we should not rush ahead with the further powers contained in the Bill, as we are, but build some safeguards into the legislation so that


Parliament can have a subsequent opportunity to scrutinise, discuss and debate those matters before confirming any actions by the Secretary of State.
From the outset, my hon. Friends and I have emphasised that the Bill is not simply confined to sorting out the mess that I have briefly described. It gives substantial additional powers to the Secretary of State to intervene in local authority accounting, introduces rate limitation in 1987–88 by formula, and excludes the courts from reviewing the Secretary of State's decisions.
There is such confusion over the current position that it is wrong for the Government to use the Bill to impose even more arbitrary decisions. We cannot take those matters lightly. I re-emphasise that, however technical, difficult and complex the Bill is, no part of our scrutiny of it will include talking for the sake of talking, or filibustering. We recognise that there are many amendments before the House—we have tabled many of them—and if we are satisfied with the explanations given by the Secretary of State or Ministers, we shall pass on quickly to the other matters before the House. That is a general statement of our position, and that has always been my position when dealing with legislation. We are not interested in talking and delaying the Committee just for the sake of it. Nor are we interested in putting tomorrow's debate in jeopardy because Opposition Members have deliberately chosen a debate on the failure of the Government's economic policies. I should like to make that absolutely clear at the outset.
Amendment No. 2A raises an issue that is especially important to the boroughs of Greenwich and Islington. Greenwich had challenged various aspects of the 1986–87 rates support grant settlement in the courts and was part way through those proceedings when the Bill had its Second Reading. The borough of Islington had also mounted a legal challenge against the Secretary of State's actions, but was at an earlier stage in its proceedings.
Apparently, the Government feared, or believed, that those legal challenges would be successful and that they would cause not only serious embarrassment to the Government, but serious difficulties for the Government's policy of rate limitation in the current financial year, let alone difficulties in the future.
The effect of the Bill, validating retrospectively all previous decisions under the Rates Act 1984 and rate support grant decisions by the Secretary of State and attempting to exclude those decisions from judicial scrutiny, is to terminate the legal proceedings that have been initiated by the London boroughs that I have mentioned. That is unacceptable.
In effect, Parliament is being asked to validate previous unlawful acts without knowing in what ways the Secretary of State may have acted unlawfully. His statement on 16 December 1986 admitted to one way in which we know that he has been acting outside the law in the definition of total and relevant expenditure. Opposition Members have continually emphasised that if it was simply that a correction would make the de jure situation accord with the de facto situation, I do not suppose that today's proceedings would have lasted even this long. We could all have agreed and gone on to debate the other urgent matters before us. However, as we have emphasised, that is not the ease.
The court cases to which I have referred sought to review other aspects of the Secretary of State's use of his discretion. The Bill excludes those matters from scrutiny,

also. The Government should allow the implementation of that blanket exclusion from the courts to await the decisions of the cases that are currently in progress, if Parliament is not to be accused, as my hon. Friend the Member for Holborn and St. Pancras (Mr. Dobson) and other hon. Members have suggested, of taking a big leap in the dark, which is what the Secretary of' State is asking us to do.
Similarly, amendment No. 2B would delay the implementation of the Bill until the Secretary of State had laid a report setting out the dates of, and other background information relating to, the legal advice that he has received on the lawfulness, or otherwise, of block grant arrangements.
On Second Reading, on 12 January, the Secretary of State conceded that he first became aware of the problem in September. However, in December last year he suggested that he had first become aware of the problem in October. We have asked him to be specific about that but, so far, he has failed to do so. I should like to ask him now, since he has had the time to check his file, which is what he said that he did not have the time to do during the debate on Second Reading, exactly when he was told of that situation. What was the date? We are even entitled to ask the time of day when he was first advised of the problem. However, the Committee is certainly entitled to know the date on which the Secretary of State was first advised of the matter. That is important for several reasons.
The Secretary of State has repeatedly said that the matter should be clarified urgently, and my hon. Friends and I agree with him on that. However, it cannot be so urgent because he delayed for almost four months, certainly for three months, before coming to the House to advise hon. Members of the problem. Having told us about the problem, he still did not advise us about his intended solutions.
Therefore, we are now perfectly entitled to ask for a specific, clear and unequivocal answer, because the Secretary of State can no longer hide behind the excuse that the Bill has been treated in that way because of its urgency. The Secretary of State has had more than sufficient time to deal with the matter far more effectively, efficiently and candidly than he has to date. Other questions follow from that. Should the legal doubts raised have been sufficient to affect the issue of the first rate support grant consultation document on 3 October? I said the first consultation document, but I think that I probably mean the second. The first had come much earlier and the third, as we know, came in December. Why was there no reference to the problem at the date of issue of that consultation document and in subsequent consultation documents? Why did the Secretary of State proceed with the rate support grant settlement if he knew that he was not going to be able to legislate without a series of major changes to the law? On what specific date did the Attorney-General give his advice to the Secretary of State? Was that before or after his announcement of 3 December?
It seems that the Government did not move with undue haste or show any alacrity in seeking to find a solution to the problem. On the contrary, they are open to the charge that they have been very dilatory, at least in the early stages. They are now using a delay of their own making to argue that the Bill is urgent. How can the Bill be described as urgent if it has taken so long to bring it before the House and when it is still apparently taking a great deal


of effort and energy to get the provisions right and to clarify the law? What the Secretary of State continues to present as a technical measure goes much further in terms of ministerial power. None of this would have been necessary and the normal, re-determined, processes in the Rates Act 1984 could have proceeded after, at most, a short delay if the Government had introduced a simple technical measure when they first became aware of the problem. We need a substantive answer to that question.
Amendments Nos. 82, 83, 84 and 85 relate to clause 4 of the Bill. They are pertinent to the exclusion of the courts from rate support grant cases. The amendments relate specifically to clause 4(6) which seeks to override any court decision and prevent it from having any effect where it is contrary to the Bill's intentions in respect of rate support grant settlements up to and including 1986–87. In previous exchanges the Secretary of State has indicated to me and the House that he thinks that we are misinterpreting those aspects of the Bill. He will have the opportunity to try to convince us of that this evening and perhaps in subsequent debates on these matters.
6 pm
Having discussed the issue since Second Reading, we are clearly and firmly advised from within local government that its interpretation of the proposals is as we suggested it was on Second Reading. However, the Bill does not provide for the circumstances in which a challenge is undertaken but the court's decision does not have a contrary effect to that intended by the Bill. Presumably, the decision will have effect in such cases. As my hon. Friend the Member for Blackburn (Mr. Straw) pointed out on Second Reading, it would still appear to be open to authorities to seek judicial review of decisions which are outside the exclusions in the Bill in order to shed light on legal interpretations in areas where demands are excluded.
Amendment No. 82 should remove the relevant words from the subsection and insert wording to restore the existing right of any council or ratepayer to seek judicial review of ministerial action. It appears to us that not only are councils' rights affected by the provisions of the Bill, but the rights of ratepayers as well. If that is so, it flies in the face of what Ministers have erroneously claimed again and again for their legislation, which is that it is aimed at being beneficial to individual ratepayers. That argument can certainly no longer be used with any credence in terms of the changes in rate support grant over the past seven years and we would argue that it cannot be used in respect of the provisions in the Bill because ratepayers would no longer have the right that they have had for a considerable time.
My understanding of amendments Nos. 83 and 84 is that they would have the more limited effect of removing the exclusion in respect of decisions taken after the passing of the Act. Perhaps we shall hear more about that from the hon. Member for Leeds, West (Mr. Meadowcroft).
Amendment No. 85 is more specific, although it would have a different effect. Decisions on cases before the courts by the date of Second Reading, 12 January 1987, would stand whether contrary to the Bill or not. That would mean that the case initiated by the London borough of Greenwich in particular would have the opportunity of obtaining a meaningful decision in the courts. It seems

wrong to us for legislation to be rushed through after a case has started with the purpose being, at least in part, to negate the possible outcome of a case before a decision has even been reached. We have put that to the Secretary of State before. We have suggested that all this has happened because of such legal challenges. He has said that that is not the case. However, the implications of the provisions of the Bill are exactly that. They would obviate a decision being reached in the courts. We believe that that is being done to prevent further embarrassment to the Secretary of State because he has abused his existing powers.
I can well understand the right hon. Gentleman not wanting an accumulation of such events. After all, there have been one or two spectacular cases in the courts dealing with his abuse of powers and his misjudgment as to what the law says. He and the Government have been considerably embarrassed as a result. I can understand him not wanting too many more of those on the record. However, I cannot think of many Ministers in many Governments who have sought to introduce legislation to block cases that were halfway through their proceedings in the courts. It is an ingenious proposition. I give the Secretary of State high marks for—what would be the expression?—his nerve or entrepreneurial skills in blocking the decision of the courts.

Mr. Tony Banks: Can my hon. Friend think of any decision by a Minister in recent years that would have been described, as one of the Secretary of State's decisions was described by the courts, as
unlawful, irrational and procedurally improper"?
Can my hon. Friend think of any other occasion when a Minister has been so castigated by a judge in a court?

Dr. Cunningham: I can remember many occasions when Ministers in this Government have acted irrationally. They have not always been castigated by a judge for doing so. However, we have just seen a combination of irrationality and irascibility on the part of the right hon. Gentleman in trying to bounce Government amendments through the Committee in this way. That has led to a debate which need not have taken place if the Secretary of State had acted more soberly in the first place.
My hon. Friend the Member for Newham, North-West (Mr. Banks) was referring to the judges' comments about the Secretary of State's actions in respect of the Greater London council and London Regional Transport. The Secretary of State had sought to misappropriate, or take unlawfully, £50 million from the Greater London council. At any rate, I believe that that was the figure.

Mr. Tony Banks: Absolutely.

Dr. Cunningham: I thought that my memory was accurate on that point. The Secretary of State is now presenting provisions that, in effect, mean that he will not wait for a judge to determine against him; he will legislate to prevent the case reaching the point when a judgment would be forthcoming.
The provisions relating to excluding the courts have serious constitutional implications. It is acknowledged that statute law has precedence over the decisions of judges and that matters to clarify law, or innovation by statute, are almost always preferable as instruments of policy to the common law. It is equally important, however, that a mechanism should exist for interpreting legislation in cases of disputes. Historically, the courts have always been able to do that in such matters.
Clause 4(1) makes it clear that the scope of the Secretary of State's actions, which are to be respectively validated, are very wide. It states:
Anything done by the Secretary of State".
The Secretary of State is giving himself an enormous and a wide-ranging administrative discretion in respect of rate support grant allocations and the formula from which the allocations are derived. We know why he wants to do that. Indeed, he has already done that, in effect, in the past three months in his series of three, unprecedented consultation documents. He has made proposals, withdrawn them, made new proposals and withdrawn them.

Mr. Ridley: I want to make a small point which may not be relevant to the Bill. We must get away from this mistaken view of three attempts, which the hon. Gentleman has spoken of, in typical and inaccurate fashion. It is normal practice to issue a global RSG proposal and later to issue a detailed breakdown containing the details affecting each different authority. The only change that was made was that I issued two of the latter detailed statements. However, all previous settlements have contained the global and detailed statements.

Dr. Cunningham: I accept the Secretary of State's explanation. He has said that he issued a statement and two consultation documents. However, that action was without precedent as far as we can tell. He has already used a very loose interpretation of the position to redistribute money from authorities, such as Birmingham, to satisfy his hon. Friends in the southern, Tory-controlled shire counties.

Mr. Denis Howell: Why are they not here?

Dr. Cunningham: They are not here because they are satisfied that the Secretary of State is a pushover and they have got what they wanted. In this legislation, the Secretary of State is trying to prevent other authorities, which may be dissatisfied, from mounting a legal challenge against him. Many authorities are already dissatisfied and my right hon. Friend the Member for Birmingham, Small Heath (Mr. Howell) represents one such authority, the city of Birmingham.
6.15 pm
We cannot accept that there are any proper grounds for seeking such a blanket exclusion of judicial review unless the Department and the Secretary of State are concerned at other aspects of the validity of past settlements. The only possible argument that the Government can mount is that they wish to preserve certainty over past and current settlements after the upheaval of discovering the illegality of their past allocations. We do not believe that that argument stands even the most cursory examination. The effect of the Government's promises will be to override cases in preparation or before the courts, for example, with respect to Islington and Greenwich.
That will preclude any other possible challenges, even for the current year which has not yet finished. The provision does not preserve a just position against opportunist challenges. It enforces what we and many local government authorities view as an unjust position in the face of challenges, which, as I have emphasised, have not yet been determined. In other words, the Secretary of

State is taking one view of the law from his position and an entirely different view of the due processes of law in respect of the position of those who disagree with him.
Amendment No. 100 relates to clause 6. Clauses 4 and 6 are similar. The Secretary of State should be asked to cite the precedent for a provision to negate a judgment of the court made after the Royal Assent to a Bill and the various other aspects of the provisions. My understanding is that a judgment either has or has not a contrary effect to the Secretary of State's suggestion. The subsection seems to operate on the basis that the Government are uncertain about how the courts will interpret the provisions of the clauses. The clauses therefore reflect a lack of confidence in the legal advice and legal position and, consequently, the detailed drafting of the Bill that the Secretary of State has presented. If that is true, it is no wonder that there are already a whole clutch of new amendments, and, as I said earlier, we confidently anticipate even more amendments from the Department of the Environment.
Through amendment No. 100 we are trying to delete subsection (4) from clause 6, which seeks to deny access to the courts in the same way as subsection (6) of clause 4. We are trying to delete it because if the Bill was carried in its present form it would prevent access to the courts by any local authority aggrieved at being designated by the Secretary of State as being rate-capped or aggrieved at the precise decisions made on rate limitation. That prohibition of litigation with respect to rate-limited authorities applies to financial years 1985–86, 1986–87 and 1987–88. The same general arguments apply with regard to subsection (4) as those that I have used in respect of other amendments relating to the powers of the courts and the legal rights of local authorities which may wish to seek redress in the courts.
Amendment No. 104 is linked in terms of its purposes to amendment No. 100. It is a less satisfactory option but it nevertheless allows access to the courts if litigation was begun by local authorities and was still before the courts on the date of Second Reading of the Bill—12 January. That is the position with regard to Greenwich and Islington.
I want to consider the Greenwich case in more detail before I finish and my view of the case is shared by the legal advisers of Greenwich council. The Bill sought to quash the 1986–87 rate limitation order as it related to Greenwich. That part of the challenge has succeeded. The Secretary of State consented to judgment in favour of Greenwich and a consent order was made by the High Court on 17 December. That is why we think that there has always been some connection between the activities and the decisions—and even the timing—of the Secretary of State and what was going on in the courts with respect to the Greenwich challenge to his actions.
The challenge also tried to prohibit the Secretary of State from redetermining multipliers which were determined for the London boroughs in the rate support grant report for England in 1986–87, as proposed by the Department of the Environment consultation paper LGF(G)8650. This part of the challenge is yet to be heard. It would have come before the courts later this month. The proposals have now been embodied in the 1986–87 first supplementary report, which the Secretary of State announced to the House on 13 January. He anticipated the outcome of those proceedings and seems to have accepted that he would have lost there too.
All this is very complicated, but it boils down to the fact that, faced with one substantial legal challenge to his present actions, the Secretary of State decided that he would empower himself to set aside court decisions because he believed that he would lose. He has consistently said that he is not seeking retrospective powers and that we have misinterpreted the arguments about this part of the Bill. We still do not accept that. The Secretary of State may tell us that it is other arguments that we have advanced which are the misinterpretations. With Greenwich and, we suspect, with Islington and, for all I know, others, the Secretary of State was in danger of having the courts overturn what he had done, and he is now legislating to prevent any local authority from having an opportunity to challenge what he is proposing.
I should like to emphasise what my hon. Friend the Member for Blackburn and others have said about these being unprecedented powers. I look forward to hearing what the Secretary of State has to say. Several of my right hon. and hon. Friends want to ask questions about general issues and about the authorities that they represent.

Mr. Ridley: It may be for the convenience of the Committee if I speak fairly briefly now to state the case as I see it in regard to matters which the hon. Member for Copeland (Dr. Cunningham) has raised. That does not exclude me from replying to arguments that are made later in the debate.
The hon. Member for Copeland has not quite understood the legal provisions in relation to court cases and I shall try to put the record straight on what the Bill does. The hon. Gentleman is in a bit of a muddle today. Having agreed the procedure motion, he voted against it. It is not quite clear to me how he would like it changed. There seems to be a great deal of steam and emotion about the Bill, which is not based, as far as I can see, on the facts of what it would do. Perhaps, therefore, it would be helpful if I set out what it would do.
I should like to put one irrelevant point aside first. It is amendment No. 2B, which proposes that the Bill should not come into effect until an order has been made and I have published practically the whole history of my dealings with this matter and said when I had received legal advice. I should like to make it absolutely clear what happened.
I first heard that there was a problem towards the end of September—as I said to the House earlier. The problem was discussed, and we sought legal advice as it was not clear whether the problem was real. I eventually decided to refer the matter to my right hon. and learned Friend the Attorney-General. His advice was finally received in late October—as I have previously told the House. That was the first moment when the Government decided that it was necessary to tackle the problem. Before we received that advice, we were not clear whether we had to tackle the problem.

Dr. Cunningham: Bearing in mind the seriousness of the problem—it affected rate support grant for all local authorities—why did the right hon. Gentleman allow the Attorney-General to take such an apparently leisurely view of his second opinion? Why did it take so many weeks for the Attorney-General to confirm that there was a problem? If it was as urgent as the right hon. Gentleman

says, why did he or his officials not telephone the Attorney-General every day saying that they must have an answer or rate support grant would be jeopardised?

Mr. Ridley: The hon. Gentleman is getting rather silly. He must ask my right hon. and learned Friend that question. I received proper legal advice from my right hon. and learned Friend and immediately set in train the complex planning and negotiations with my colleagues which were necessary to have the Bill brought to the stage at which it could be published just before Christmas, and about six weeks after we received legal advice. I should have thought that, in view of the complexity of the Bill, about which Opposition Members have been free with their criticism, it was a remarkable effort to get a Bill of this difficulty drafted in such a short time. I have no desire to apologise for that, let alone to accede to the hon. Gentleman's suggestion that I should publish my daily timetables.

Mr. Meadowcroft: Does the Secretary of State agree that the procedures would have been speeded up if the Bill had been confined to rectifying the problem and if there had been no other clauses?

Mr. Ridley: That is where the Committee has not quite understood the Bill. That is what the Bill does. I concede immediately that the Bill goes further in regard to rate limitations. As I said on Second Reading and have said in statements, it was not possible to use Rates Act procedures to bring rate and precept limitations into effect for the coming financial year in time. I plead guilty, if guilt is involved, in that the Bill goes further than pure validation in regard to rate limitation.
As for the power of the courts, I hope to show the hon. Member for Copeland that nothing is done other than to validate the past in relation to matters of rate support grant.

Ms. Clare Short: The Secretary of State will know that his officials have written to Birmingham city council saying that they are calling into question the 1984–85 settlement. Surely that is retrospective and not just validating the past and therefore goes further than the explanation that he has just given.

Mr. Ridley: We could have a debate on the Birmingham situation without trying to bring it into this amendment. When we decide upon the best amendment under which we can discuss the problems of Birmingham, I shall look forward to listening to the hon. Lady.
The Bill seeks to validate all past decisions and to protect them from legal challenge but not to validate any future decisions. It is perfectly possible——

Mr. Chris Smith: rose——

Mr. Ridley: The hon. Gentleman need not get excited. I have to go through several statements before I reach the justification for that remark.
If anything Birmingham or I may do in the future is subject to a legal challenge, such a challenge can take place. It is not a question of going back, as argued by the hon. Member for Birmingham, Ladywood (Ms. Short). First of all, it is necessary to validate all past decisions relating to RSG. Secondly, there will be some interference with court cases relating to rate limitation and precept


limitation, for the very good reason that those limitations are decided in the Bill and that normal procedures are set aside. One could not have a situation where a court found on some rate limitation issues before Royal Assent to the Bill. Such a court decision could be immediately overruled by the Bill because statute law overrides any decision of the courts. That is why the situation is different.
I now wish to discuss amendment No. 2A, to which the hon. Member for Copeland has referred. The hon. Gentleman suggests that any cases to do with rate support grant that were before the courts before the introduction of the Bill should be allowed to run their full course. The hon. Gentleman should consider the practicalities. It is possible that in the one or two cases that fall into this category—that is about all there are—a case could be decided, go to appeal and finally to the House of Lords. Before such a case could be finally cleared up, one way or another, it could well take until the end of this year.
The hon. Member for Copeland is aware that it is necessary to get the Bill enacted as soon as possible, and certainly before the start of the new financial year. The whole operation of the Bill would be held up if a court case took as long as I have described. That is not a criticism of the judiciary—it must do its work properly—but if such delays occurred it is possible that that would lead to procrastination in the Bill coming into effect and local authorities would not know where they were and could not have grants paid to them.

Dr. Cunningham: I am very anxious to understand exactly what the Secretary of State is saying and its implications. The right hon. Gentleman has said that our interpretation is wrong—that the Bill, if passed, would retrospectively validate action he has taken and make such action immune from legal challenge. I would be happy if the right hon. Gentleman could clarify that, because it is very important. Is he saying that the provisions of the Bill mean that local authorities could challenge past decisions, but not on the grounds on which they may challenge them at the moment?

Mr. Ridley: It would be better if the hon. Gentleman would allow me to develop my argument. I am simply dealing with amendment No. 2A that requests that the Bill does not come into effect until all current cases which were before the courts before the Bill was introduced are cleared up. My argument is that that would lead to such a long delay that it would be intolerable.
Allow me to deal with the two cases raised by the hon. Member for Copeland. The first case, the Greenwich case, has two legs to it. First of all, it challenges what I intend to do in the first supplementary report for 1986–87. That is what the hon. Gentleman said. The Bill is not concerned—as suggested by some hon. Members—with validating future decisions taken in accordance with the provisions of the Bill and related legislation. Local authorities will be quite free to challenge those decisions. Any court decisions on those legal proceedings brought by Greenwich, but yet to be heard, will not be affected by the Bill. The Greenwich case concerns a decision that has not been taken and that is the first supplementary report for 1986–87. Once the Bill is enacted, it will be perfectly possible for that particular legal argument to be resumed. It will not be affected by the passage of the Bill.
The other leg of the Greenwich case is in a different category.

Mr. Tony Banks: rose——

Mr. Ridley: If I may just finish this sentence, I shall gladly give way.
The other leg of the argument concerns the rate limit for 1986–87. I conceded that part of the case because of the total expenditure problem. I could not have defended my case in court because I discovered that the definition of total expenditure was not as we all thought it was. There was no point in fighting a case when the law was suspect. That was not the grounds on which Greenwich fought its case—it was totally incidental to it.
On the other hand, the case could not be fought without the law being clarified as to what was meant by total expenditure. Thus, the limit will be validated by clause 6 in this case, and the amendment will not affect it.

Mr. Banks: I am grateful to the right hon. Gentleman for giving way because I want to understand exactly what he is saying. I hope he will bear with me if I repeat once again what he said. Is he telling the House, as I understood that he was, that the challenge made by Greenwich to prohibit him from redetermining multipliers, determined for London boroughs in the rate support grant report 1986–87—I understand that that challenge is due to be heard on 29 and 30 January—can still go ahead? If the court decides that, in redetermining the multipliers, the Secretary of State has acted unlawfully or whatever, he must abide by the decision of the court with regard to that part of Greenwich's challenge. Would that still be allowed even under this legislation?

Mr. Ridley: Subject to not knowing the dates of the court proceedings, the hon. Gentleman is correct. All the Bill does is validate the definition of total expenditure. The case that Greenwich is bringing cannot be fought and will not make any sense unless that is an accepted legal definition of total expenditure. Once there is such a definition, any extraneous matters can be considered by the court.
It is not possible to fight a case, assuming that the old definition of total expenditure was in existence, and win that case on the basis that the definition of total and relevant expenditure, on which we were all working, was invalid. The Bill substitutes a new definition of total expenditure so that there is no going back over the old argument.

Mr. Straw: The Opposition are genuinely trying to follow the Secretary of State's argument.
On the face of it, the powers that the Secretary of State is taking under clauses 4(6) and 6(4) are extraordinary. I can understand why the Secretary of State is seeking to validate past acts under clause 4(1). I do not understand why, having taken the power to validate past acts, which is consistent with what the rest of the Bill is seeking to do, the right hon. Gentleman still thinks it is necessary, having got the deemed validation of past acts, to say that, notwithstanding the decision of any court, whether before or after the passing of the Act, purporting to have a contrary effect, his decision will stand.
From reading the Bill, one concludes that any decisions made by the right hon. Gentleman under the powers of the Rates Act 1984, right up to the date when this Bill goes to Royal Assent—that includes future acts of his—are deemed validated by this Bill and are then made judge-proof. It is the judge-proof part to which we take exception.

Ms. Clare Short: rose——

Mr. Ridley: I would be grateful if the hon. Gentleman and the hon. Lady would allow me to get to this point. I want to move to it but hon. Members keep asking in advance about the logical exposition of my speech. As the hon. Member for Blackburn (Mr. Straw) says, clause 4(1) and clause 6(1), (2), (3) set out the definitions of total expenditure and rate capping, and clause 4(6) validates that for the past in relation to rate support grant and total expenditure, and clause 6(4) validates all past rate support grant decisions. As I understand the hon. Gentleman, he is saying that he accepts that in the context of being necessary to what the Bill is seeking to do.
I shall now turn to the phrase which has excited the Opposition so much, the phrase
before or after the passing of this Act.
The situation is simple, and the solution is easy. Obviously, a decision taken by a court before the passing of this Act would be overridden by the validation. Therefore, there is no point in a court coming to such a decision. We might as well say in the legislation that that is what will happen. If a court considers a case which is concluded before the passing of this Act but does not give judgment until after the passing of this Act, then of course the court would give its decision after the passing of the Act. That is why the phrase is there. It catches the case, if one should occur, of a court concluding its business before the passing of the Bill but not giving its decision until after the passing of the Bill.
After the Bill is passed it has no effect at all upon judicial review or on any other action which might be brought against me. After the Act is passed, the definition of total expenditure and relevant expenditure contained in the Bill becomes the law. That definition takes over from the holding provisions about which the hon. Gentleman is complaining, that court decisions are invalid until the Bill is passed. I hope that that clears up this little bit of trouble.

Mr. Straw: It is important for us to be clear. It is true that in respect of decisions which the Secretary of State makes after the passing of the Bill, these two subsections have no specific effect. We are complaining about the fact that decisions that he may make up until the passing of the Bill will not be subject to judicial review because of these two subsections. That is wrong, and the Secretary of State has not so far explained why he thinks that is right.

Mr. Ridley: It depends on the subject of the litigation. If it has to do with total expenditure or involves the definition of total expenditure, the Act will prevail over any decision of the court. The hon. Gentleman must realise that any authority could go to court and claim that the definition of total and relevant expenditure is not the one that we have all been working on but was the one in the original 1980 Act. On that basis, authorities would win every case and in order to discourage them from doing that, it must be right—[Interruption.] If hon. Gentlemen do not understand, it would be wiser for them not to giggle. It must be right to say that none of those decisions can be upheld because they are validated by the Bill.
If a matter has nothing to do with the definition of total expenditure or with the rate support grant calculation based on it, it is judiciable but it might be better for the court to await the passage of the Bill so that it knows the

definition of total expenditure. If the court prefers not to do that, it is perfectly possible for the case to proceed, but it will do so in the light of the fact that any decision which contravenes the definition of total expenditure in this Bill will later be proved invalid. However, if the matter is totally extraneous to total expenditure and is about something totally different like multipliers, which are not affected, it will be possible for the court to continue to determine the issue, just as it is possible for a court to decide that I was not wearing a seat belt when I should have been.

Mr. Chris Smith: I follow the Secretary of State's argument on the definitions of total expenditure and the impact of the Bill. However, a point also arises from clause 6 about the designation of authorities for rate limitation and the setting of limits under the rate limitation proposals. The Secretary of State is commending to us a Bill which clearly says that any designation and any determination and notification of total expenditure under the Act for the financial year beginning in 1987—which is not yet upon us—cannot be challenged in the courts. Those are decisions which the Secretary of State has said he is likely to take, but he has not yet taken them and presumably he will not make them in final form until after the Royal Assent has been given to the Bill. Surely that is prospective and not retrospective legislation.

Mr. Ridley: That is the counterpart of what I said earlier, that it is necessary to put the rate and precept limitation proposals on the face of the Bill. I think they are in schedule 2 and the hon. Gentleman will have seen the complicated formula. As I have said, that is necessary because it will not be possible to complete the procedures after Royal Assent to the Bill and before authorities need to know what the rate limit is to be. I admit that this is a departure from straight validation, but it was the only course open to the Government and we have adopted the procedure of specifying the rate limits. They can be debated and amended in the House if hon. Members do not think that we have got it right.
The statute law which the Bill will become when it receives Royal Assent overrides any decision of the judiciary. If we did not include this provision and if there was a rate limit court case this month which the Government lost, it would still be overridden by the Bill when it received Royal Assent because the Bill specifies the rate limits. In a sense clause 6(4) is helpful to the court because it is perfectly obvious in common logic that it must be right to include that clause. I hope that that helps hon. Members to understand why these powers are here.
I concede that the powers about rate limitation are slightly different from pure validation, but I hope that the Opposition will concede that the parts of the Bill relating to rate support grant and total expenditure are no more than pure validation of the past and a necessary legal protection to stop the lacuna in the law being exploited in cases brought before the Bill becomes law. None of the Opposition amendments is necessary—indeed, some of them weaken the provisions that I have described—and I invite the Committee to reject them.

Mr. Meadowcroft: I have listened carefully to the Secretary of State, and I shall try to return in detail to some of the points about validation and retrospection


because they are the nub of this group of amendments. I should like to concentrate on amendments Nos. 83, 84, 102 and 103 because they are about retrospection. It is rather odd that the Secretary of State keeps on talking about the need for parliamentary haste. For so long there has been Government delay. It is quite apparent from the explanations that the Secretary of State has endeavoured to give us that the matter is so complex that there is no way in which, if we are to get this right this time, the matter should be pushed on without adequate clarification.
I appreciate the Government's dilemma in this matter. I appreciate that they are endeavouring to safeguard their position in the law, both before and after the passage of the Bill. The problem in trying to accept that dilemma and in endeavouring to assist the Government in coping with it is whether the terms of the Bill are drawn so widely that even in those matters in which they are endeavouring only to validate their past actions they take the provisions well beyond what would simply be validation. If the Bill is drawn too widely simply to be validation in these clauses, a misreading would simply mean that future legal safeguards would not be required. In other words, if the Secretary of State says that we who believe that the words "future clearance" and "future immunity" are required and are misreading the clause, then I suspect that we need to he persuaded further that a possible legal challenge to the Government's position could not be taken afterwards, rather than simply by the court's decision being announced afterwards.
I cannot conceive of a court commencing an action, when the Bill goes on to the statute book, before its decision is announced, not being able to take account of the fact that the law was changed before the decision is announced. Presumably the law will become different at that point.

Mr. Ridley: At the time a court hears the evidence and considers the issue, the law will be as it is now. The law comes to its own conclusion on the basis of the current law, and if between then and Royal Assent there is a change in the law, the whole matter is nonsense. The hon. Gentleman might well say that this is unlikely to happen, but good draftmanship and carefully prepared Bills guard against that unlikely event. That is why it has taken a little time to put the Bill together.

Mr. Meadowcroft: The temptation to accept the Secretary of State's interpretation and the desire to rely on good draftmanship is hardly borne out by the past. It is because we have not had good draftmanship that we are here today, wasting parliamentary time which could be better spent on a host of issues that will affect the future and deal with many of the crises that we face in far better ways than simply trying to get past legislation right for the sake of the Government's own face saving.
The issue of how widely drawn the Bill should be to avoid legal challenge is complicated. Even if the law had the effect that is intended, presumably the law would still be open to legal challenge. The problem is whether the Bill as drafted now will permit the continuation of legal challenges that were possible in the past as opposed to cutting out those as well. That is a matter of opinion. I accept that the Secretary of State has tried to convince us that they will still be allowed, but looking at the Bill as drafted I am unconvinced that it would not catch actions which would have been legitimate if they had been able to

be brought under the law as it was thought to be, as opposed to what it turned out to be. Therefore, there is a real difficulty in accepting that interpretation.
I accept also that the Secretary of State is trying to do a belt-and-braces job. The Committee would abdicate its responsibility to protect not only the rights of individuals but the rights of councils if it allowed a too open-ended future power. It is tempting to accept the Secretary of State's interpretation, but he is saying that, in the context of legislation in this complex field of rate support grant, definitions of central financing of local government and so on, we want an enabling power for the future to catch challenges that we believe would not have been possible had the law been as we thought it was. I heard the right hon. Member for Birmingham, Small Heath (Mr. Howell) say that it would be a useful precedent if ever there were a Government of a Left-wing colour.

Mr. Allan Roberts: Is the hon. Gentleman aware that the Secretary of State for the Environment made the same case as Derek Hatton and the Clay Cross councillors made for retrospective legislation to indemnify them for actions which were illegal at the time they took them and which were resisted by the Labour party because of the nature of that legislation, for which the Government are now setting a precedent?

Mr. Meadowcroft: I agree only partly with the hon. Gentleman's remarks. The difference in the case that he puts is that there is no sense in which the challenge that was made by, for instance, the Clay Cross councillors was even thought to be legal at the time. The Clay Cross councillors were well aware of what they were doing and relied on possible future indemnity, even in relation to the fact that their action was illegal. That is very different from the fact that the Secretary of State believes that what he did was legal, and turned out not to be.

Mr. Roberts: Many councillors who were surcharged under the Government's legislation for not setting a rate on time believed that they were not breaking the law at the time they set that rate.

Mr. Meadowcroft: I accept that. Later in the debate we shall refer to some aspects of accounting procedures that are much more akin to what the hon. Gentleman said. Efforts to stop local authorities doing what they rightly believed to be legal, whether it was prudent or otherwise, is a different matter, but it was legal. Perhaps the hon. Gentleman's charge would be more appropriate at that point. The analogy is much nearer to the kind of enabling Act that the right hon. Member for Chesterfield (Mr. Benn) proposed, as was proposed by other Labour politicians in times past, to give powers in future for indemnity from the law. Indeed, it is a useful but dangerous precedent.
The danger is that if there is no consensus, not on the political values but on the procedures for democracy, we shall open up the same powers to be used or abused by parties of different colours. That danger is inherent in this process. The amendments have been tabled in the names of my hon. Friends and myself because, if the Bill's intention is a narrow definition of the ground of challenge—I do not believe that there is a need for blanket future protection—and if the Bill allows a wider interpretation, clauses 4(6) and 6(4) must not remain unamended. That is the nub of the argument. It demonstrates how


vulnerable the Government believe they are that they have to take such powers to themselves for future as well as past validation. It shows also how polarised central-local government relationships now are. The Government are trying to pre-empt future legal challenge which they believe will come about simply because they have so offended and embittered that relationship.

Mr. Ridley: I thought I had explained to the hon. Gentleman that the only circumstances in which a decision in the future will be upset by the Bill when it becomes an Act is when judgment is delivered after Royal Assent. If a case is heard after Royal Assent, it will be able to subject to judicial review any decision that I have made, together with any action or disputed point in law. The law will be changed by the Bill. In no sense does the Bill prejudice the courts in taking any future action of any sort in this field or in any other.

Mr. Meadowcroft: I hope that the Secretary of State is right about that point. The difficulty that Opposition Members face is that the Secretary of State has said to us time and again that this measure covers certain things and now we find that it does not. If that is what the right hon. Gentleman means, he has not expressed it or drafted it well. It does not clearly say that. Those who are examining the legislation, with the limited time available, and trying to get some advice as to what it means, believe that it covers something which is not simply retrospective in this sense.
If the Secretary of State is endeavouring only to put that point and he is giving an undertaking to the House that things which would not have been caught before but were open to legal challenge will still be available to challenge by the council, then I accept his genuine wish for that to be the case. The measure is not well drafted. The amendments should carefully be considered. It is right that these matters should be discussed. At least the Secretary of State has given us a clear undertaking about his intentions. Nevertheless, far too many powers are being given away. That is why these amendments have been tabled.

7 pm

Mr. Chris Smith: I listened carefully to the Secretary of State's speech, and I wish to address my remarks to the authority that I represent, Islington, that is contesting this matter in the courts. However, before doing so I wish to make a few general points.
I begin by picking up from where the hon. Member for Leeds, West (Mr. Meadowcroft) has just left off. Even if we accept the Secretary of State's intention to validate the decisions of previous Secretaries of State relating to total expenditure, two questions immediately arise. First, is the Secretary of State's interpretation of the limited nature of the restrictions on the future action of the courts right? I fear that this Secretary of State does not have a very good track record. Therefore, we are entitled to ask whether the Secretary of State's interpretation of what the Bill says about the future actions of the courts is right. Secondly, even if the Secretary of State is right and all that the Bill does is validate actions that have been taken illegally by previous Secretaries of State, the Committee should not regard that matter lightly. Retrospectively it puts Secretaries of State above the law.
Furthermore, when I referred to clause 6 and the effect of rate limitation and rate capping under the Rates Act 1984, the Secretary of State admitted that the Bill gives him carte blanche to make decisions on rate limitation and designation under the Rates Act for the financial year 1987–88. The complicated formulae set out in schedule 2 to the Bill—which would be laughable if their implications were not so serious for the services that are provided for the millions of people in this country—relate to classes of authorities, not to individual local authorities.
As a Member of Parliament who represents an area that has been designated for rate capping by this Government—a point to which I shall return, because I believe that it has been wrongly designated—there is no way under the Bill for me to question in detail the reasoning, thinking, logic and preparation that led the Secretary of State to declare that he would rate-cap my authority. I am unable to raise questions on that issue under the Bill. I can raise questions on a collectivity of authorities, because that is what the Bill deals with, but I cannot do so in relation to one authority alone.
The Bill gives the Secretary of State a decision-making power that cannot be challenged in the courts to designate my local authority for the financial year 1987–88. That is not just a retrospective setting of the Secretary of State above the law; it is a prospective setting of the Secretary of State above the law, because it relates to next year's financial expenditure by my local authority on services that deeply affect thousands of my constituents. The Secretary of State says that he will designate and determine the rate-capping limit for my local authority, and it will be impossible for the designation or for the rate-capping limit to be challenged by the authority in the courts.
If in the dense morass of words to which the Secretary of State treated us earlier today he meant to say that he did not mean that at all but that the London borough of Islington would be able to challenge his intended rate-capping limit in the courts, I should be partially satisfied. I say "partially" because there are other matters with which I wish to deal later. If the Secretary of State intends to speak again before we reach a decision on the amendment, I should be grateful if he would tell us what the position will be of an individual local authority that is rate capped under clause 6 and schedule 2 if it seeks to challenge his determination of its rate-capped limit.
The Secretary of State rightly said that statute law overrides any court decision. The traditional, constitutional principle is that Parliament makes the laws and that the courts interpret them. It is accepted that the interpretation process is secondary to the making of statute law. However, we are dealing not so much with the passing of statute law as with the administrative decisions of Secretaries of State that are enabled by statute law. Increasingly, this Government has passed enabling legislation that lays down general powers for a Secretary of State which allow him to go ahead and make administrative decisions with, at most, a debate on an order at 11 o'clock at night. By that process, statute law is modified and court decisions become ever more important to the interpretation of the law.
The Secretary of State claims that we are dealing with the priority of statute law over the interpretation of statute law in the courts, but he is not telling the whole story. In


many cases we are dealing with the administrative interpretation of statute law as opposed to the legal interpretation of statute law.
Amendments Nos. 2A and 100 relate specifically to court actions that are now in progress relating to rate limitation designation under the Rates Act 1984. One of those actions has been brought by the London borough of Islington. On 17 July 1986 the Secretary of State designated 20 local authorities, including the London borough of Islington, under section 2(1) of the Rates Act. As he was required to do by legislation, the Secretary of State stated at that time the principles upon which those councils had been chosen for rate capping. Islington was designated because, amongst other things, it appeared to the Secretary of State, from
best information available to him
at 17 July 1986, that Islington's total expenditure for 1986–87 was likely to exceed its grant-related expenditure figure for that year by at least 12·5 per cent.
The Secretary of State, and previous Secretaries of State, have played around with the percentage increase over grant-related expenditure figures. In previous years, the figure had been 20 per cent., which was the figure that the former Secretary of State, the right hon. Member for Wanstead and Woodford (Mr. Jenkin), gave in the middle of the night in Committee on the Rates Bill.
That figure of 20 per cent. was modified by this Secretary of State in his announcement of July 1986 to 12·5 per cent. That was the benchmark. Local authorities that were 12·5 per cent. over the grant-related expenditure were profligate, overspending and acting to the detriment of their ratepayers, according to the Secretary of State.
The London borough of Islington was caught by that provision on the basis of the information available to the Secretary of State at that time. It would appear, from the way that he made that decision, that the figure of 12·5 per cent. was specifically chosen to catch the London borough of Islington, because its expenditure above grant-related expenditure figure was 12·52 per cent—a difference of 0·02 per cent. or £15,000. In terms of the millions of pounds that form the London borough of Islington's budget, that was a marginal figure. One has to ask whether the figure of 12·5 per cent. was selected specifically to ensure that Islington was included. I suspect that the answer to that question is yes.
On the basis of the figures that the Secretary of State had at that time, Islington was marginally above the rate-cap limit that he had set of 12·5 per cent. The next most marginal of the other rate-capped authorities on the list was Brighton, which was 13·31 per cent. over grant-related expenditure.
Soon after being designated, and soon after the announcement of July 1986, Islington informed the Secretary of State that, owing to an over-estimate of at least £100,000 of the precepts and levies elements of the rates on its own properties, its expenditure for 1986–87 would be reduced to only 12·42 per cent. above the grant-related expenditure. That was not changed by any definition of proposed expenditure or actual expenditure; it was a purely technical matter in so far as it related to the precepts and levies elements of the rates on council properties.
The information that the Secretary of State had available when he made that decision was inadequate and incorrect. The expenditure that he should have been looking at for the London borough of Islington was not

12·52 per cent. over the grant-related expenditure, but 12·42 per cent. over the grant-related expenditure. Therefore, the expenditure was below the 12·5 per cent. figure that the Secretary of State had decided upon as the principle for designation.
7.15 pm
As a result of the discovery of that mistake on the part of the Secretary of State, Islington asked the Secretary of State to withdraw the designation but he refused to do so. Even though he had set the principle at 12·5 per cent., and Islington clearly and specifically demonstrated to him subsequently that it fell below that threshold criterion, the Secretary of State decided that Islington should remain rate-capped.
On that specific point, Islington then asked for judicial review of the Secretary of State's decision. It took that decision on counsel's advice, believing that it had an extremely good case to seek an order of certiorari, quashing the decision to designate, and an order of mandamus requiring him to consider, in accordance with the law, Islington's request that he withdraw or not proceed with the designation. The hearing is due to start on 21 January 1987.
However, subsequent to that, the Secretary of State has discovered that, for completely different reasons, many of the decisions on which he and many previous Secretaries of State have been basing their decisions in relation to rate support grants—definitions of total expenditure and rate limitations—have been ultra vires in the past.
The Secretary of State has brought the Bill before the House seeking to validate both previous decisions and intended future decisions. In so doing, he has effectively conceded that the judicial review which the London borough of Islington has sought against his original decision is now not needed, because his designation of last July was rendered illegal and nugatory. What he has therefore done, through the Treasury solicitor—there is considerable correspondence between the Treasury solicitor acting for the Secretary of State and the borough solicitor of the London borough of Islington acting for the borough—is to concede that the Secretary of State's July decision was wrong, and therefore there is no contest to be made in the court.
By so conceding, the Secretary of State has conceded the more general principles that form part of the content of the Bill. He has not conceded the specific point about the expenditure over grant-related expenditure which formed the nub of the London borough of Islington's case in relation to its designation under the rate-capping.
The Local Government Finance Bill seeks, in effect, to prevent the courts from quashing designations that have been challenged on any grounds, whether or not they are to do with an error in relation to rate support grant or total expenditure. What is effectively happening in this legislation is that the Secretary of State is saying that he will take powers under this Bill to render all existing court actions invalid, whether or not they are specifically related to the point of the Bill.
The challenge that has been mounted by the London borough of Islington does not have to do principally with the point of the Bill. It relates to the amount that the Secretary of State is calculating with regard to the London borough of Islington's expenditure over and above the grant-related expenditure assessment.
I should like the Secretary of State not only to answer the first question that I put to him about the general position of rate-capped authorities in seeking to challenge the 1987–88 rate determination, but also to answer the specific question whether he accepts, having had the figures from the London borough of Islington, that the figure of 12·42 per cent. above GRE is the figure that relates to Islington's expenditure rather than the figure of 12·52 per cent., which he had in front of him when he made his original decision to determine a figure for Islington in July 1986.
If the right hon. Gentleman accepts that, and if his intention is still to catch only those authorities on 12·5 per cent. and above, will he now agree to seek a means of excluding the London borough of Islington from rate determination and a rate-cap limit, because it clearly does not fall above the threshold that he had originally intended and set in July last year?
If the right hon. Gentleman does not give that assurance, will he accept that, by bringing the Bill before the House, he is effectively including a borough for rate-capping which, under his original intention of last July, he would have had to exclude because it would not have fallen on the wrong side of his own threshold?
If the right hon. Gentleman accepts that point, is not the effect of the Bill to ensure that he brings the London borough of Islington into rate-capping whereas otherwise it would have fallen outside rate-capping? The Secretary of State will know that the borough had an extremely good chance of ensuring that his original inclusion of the borough was quashed by the court because he was acting on incorrect information.
If that is the case, the Secretary of State's plea at the Dispatch Box that all he is doing is validating previous decisions and, of course, that he has no intention of setting himself above the law sounds, I am afraid, rather hollow. By bringing the Bill before the House, he will, if it is passed, have included my borough for rate-capping when previously, by action of the court, the borough would have been able to avoid the rate-cap limit. If that is the case, I am afraid that services to thousands of my constituents will be put at risk.
I should be grateful for answers to those specific questions when the Secretary of State replies. I fear that my borough and my constituents will be badly hit by the Bill. They at least had a chance of representation through the courts and an escape from rate-capping before the Bill was laid before us.

Ms. Clare Short: I, like most Labour Members, listened with great care to the Secretary of State's explanation of the extraordinary powers that we are debating. I referred previously, in an intervention, to Birmingham. The Secretary of State said that he was happy to debate the situation there. Amendment No. 87, which we shall come to later, relates specifically to Birmingham, but I want to examine what the Secretary of State said about the powers that are taken under the Bill in relation to Birmingham. I cannot understand how what the right hon. Gentleman is threatening to do to Birmingham can be legalised by the Bill or how the explanation that he gave us today can be correct.
The Secretary of State made it clear repeatedly that the Bill does nothing more than validate the past and put right

for the future the position that the House and local government thought obtained in the past. The treasurer of Birmingham denies that, and suggests that the definitions given by the Secretary of State in the Bill are contrary to what everyone in local government has believed and practised.
In Birmingham, the Secretary of State intends retrospectively to invalidate some fund contributions legally made by Birmingham as far back as 1983–84—decisions that were certified by the Audit Commission. Birmingham's auditors, Price Waterhouse, wrote to the Department in May 1986 in relation to the 1984–85 accounts and said:
We have considered this issue in some detail and have concluded that the contribution is a lawful charge.
On 16 December 1986 a Mr. A. C. B. Ramsay from the Secretary of State's Department wrote to Birmingham's chief executive saying that it was likely, because of the new Bill, that actions taken in the past would be called into question. It does not say that it is certain, but that the new Bill may have implications for Birmingham as from its outturn return for 1984–85. The letter says:
The outturn information for 1984–85 submitted on your authority's RSIB Form covered by an auditor's certificate dated 2 October 1985 and reissued on 16 May 1986, shows unallocated net contributions from the rate fund revenue account to special funds of £15,417,652 and a closing deficit on that account of £7,450,980.
The letter goes on to say:
It may be that these contributions or some part of them fall within the category of contributions which the Secretary of State proposes to specify"—
that is an action in the future—
should not be included in 'relevant' and therefore 'total expenditure'.
The net effect on Birmingham of that possible proposition—it seems that it is not decided, yet we have been told that the legislation is all about putting right what everybody knew was the case in the past—is to cost the people of Birmingham £8 million. We have done rather badly out of the Secretary of State because we recently also lost some £30 million because of other decisions that he has made. That amount is a considerable sum. For the average family it is about £12 a year.
I am asking the Secretary of State specifically, please, to explain how he can suggest that the clauses and the powers simply validate the past. How can they possibly give him power to make a decision in the case of Birmingham that has not yet been made about how much of a notional sum that was spent in 1983–84 might be taken away from the citizens of Birmingham? Can he give us any possible explanation that ties in with the explanation that he gave previously suggesting that no future decision of the Secretary of State would be covered by the vast powers that he is taking to make decisions that cannot be challenged in the courts?

Mr. Tony Banks: I want to talk specifically about amendment No. 2A and make sure as far as I can—I am afraid that I cannot be at all certain—that at the end I shall understand exactly what the Bill means.
The amendment has particular relevance to Islington, for which my hon. Friend the Member for Islington, South and Finsbury (Mr. Smith) has just spoken, and Greenwich. If our good and late colleague, Guy Barnett, were here, I am sure that he would want to raise in great detail the Bill's impact on his borough of Greenwich, which he served so well. He would certainly do it a lot


better than ever I could. I am sure that for one brief moment tonight the Committee will be united in saying that we wish that Guy Barnett were here, participating, as he normally would have done, in a Bill of this sort.
I want to deal with the question of the Greenwich challenge because it seems to be the borough that is most caught by the Bill, although I shall show later how badly Newham will be affected by the Bill. Cases that are already in the courts, Greenwich and Islington, are directly affected.
As I understand it, the Greenwich challenge sought to quash the 1986–87 rating order on it. In this part of the challenge, the Secretary of State has now consented to judgment in favour of Greenwich, and the order was made by the High Court on 17 December. That is affected by the Bill, because clause 6 will re-ratecap Greenwich for 1986–87 and reverse the High Court decision. Perhaps the Secretary of State can confirm this. He is shaking his head. Does he mean that that is not the situation? I am not making cheap debating points. I am merely asking him for information. Even if we disagree, we should at least understand what is going on, so that we can make progress. I understood that the Secretary of State had consented to judgment in favour of Greenwich in the High Court on 17 December, but is now seeking to reverse that High Court decision by the Bill. The Secretary of State is not saying anything, so I shall push on.
7.30 pm
I am assuming that the Secretary of State knows what is going on. If he does not, we are in an even worse mess than the most pessimistic of us thought that we were in to start with That is how byzantine and obscurantist the legislation is becoming. Before I completely lose patience with the Bill, I point out that it demonstrates like no other just how unwise and ludicrous it is for the Committee to try to get itself involved in the detailed minutiae of local government finance. This is absurd. Ten years ago, I was the chairman of a finance committee, and I understood local government finance. We did not get ourselves into the mess which local government now unfortunately gets itself because the Government keep changing the rules and moving the goalposts. However, there is no way that I can pretend that I understand, in the detail that I feel that I should if I am asked to make a decision, the Bill or the position of local government finance.
When I asked the Secretary of State about the second leg of the Greenwich approach in the courts—the redetermining of the multipliers—he said that that part of the Greenwich challenge could still go ahead in the courts. I assume that when he said that he was not saying that it could go ahead in the courts if it has enough money to pay for the lawyers. I assume that there will be some valid reason for proceeding with the court case of Greenwich's challenge to the redetermination of multipliers.

Mr. Ridley: I can help the hon. Gentleman on this. If and when I make a first supplementary report for 1986–87—which I cannot do before the passing of the Bill—I shall be making a new decision in that supplementary report, which will be challengeable in the courts. If Greenwich wishes to challenge that, it can, but it is not possible to do that on the basis of the definition in the Bill until the Bill has reached the statute book.

Mr. Banks: As I understand it from my information, Greenwich is pursuing redetermination of the multipliers

in the courts at a hearing on 29 and 30 January. It would be helpful to everyone if the Secretary of State would further advise the Committee as to whether it is even remotely possible that, if the courts were to find in favour of Greenwich, he would be prepared to accept that judgment. I am sure that he does not want the resources of the ratepayers of Greenwich to be wasted by what would, in effect, become an idle and useless challenge in the courts because, under this legislation, the Secretary of State will be able to set aside any decision made by the High Court on the redetermination of multipliers.

Mr. Chris Smith: I have been following my hon. Friend's argument carefully. I am particularly concerned about multipliers. In the complex formula included in schedule 2, in relation to a category of boroughs that includes Greenwich, there is a specific point about the multiplier on page 13. It says that "M", which is part of the crucial formula,
is the figure shown as the multiplier in relation to the authority in the relevant Report.
We have no knowledge for certain of what the relevant report will say about the multiplier for Greenwich. However, clause 6 says:
any designation of an authority…and…any determination…for an authority's total expenditure…shall…be deemed to have been in compliance
and that shall not be challengeable.
How can it be that the Secretary of State can determine a multiplier for Greenwich through the formula in schedule 2 and apply it in the relevant report to which it refers to determine a ratecap limit, and then not be challengeable? That question must be asked.

Mr. Banks: That question must be asked, but not of me. The Secretary of State must answer it. I do not understand how this will operate. If Greenwich is successful in its challenge in the courts over the redetermination of multipliers, that will affect the 1986–87 rate support grant settlement. As I understand it, that will then be caught up within the Act, as it will become, so any decision made by the courts in respect of the multipliers for Greenwich will not be to the benefit of Greenwich because it will be set aside by this legislation.
However, earlier, the Secretary of State clearly implied that Greenwich could go to the courts and proceed with its challenge to the multipliers. I would be prepared to give way if the Secretary of State could throw a little more light on this part of the Bill.
The redetermination of multipliers is a highly complicated subject. Greenwich came to the challenge in the courts for the following reason. In simple terms, the previous Secretary of State received a complaint from Bromley that it did not get an adequate allowance in rate support grant terms for taking over additional highways on the abolition of the GLC. I am advised that the Secretary of State agreed, and proposed to give Bromley more grant. He decided to find this money by penalising other local authorities, and inner London boroughs in particular. Greenwich is the largest potential loser with an envisaged loss of £3·822 million grant in the 1986–87 entitlement.
Greenwich objected that the Secretary of State had no powers to do this, and this he now acknowledges. However, although we know that the Secretary of State is the only person who is absolutely certain what the law is,


Greenwich still maintains that he has no powers to redetermine multipliers and penalise Greenwich as proposed.
The stated intention of the 1986–87 RSG report was to avoid losses or gains to ratepayers as a result of the GLC abolition. There was much talk about that during the passage of the Local Government Act 1985. The Government sought to ensure that there were no losses or gains to ratepayers as a result of abolition by determining multipliers to adjust the rate support grant entitlement of successor authorities.
As a preliminary, it was necessary to make an expenditure assumption to reflect the transfer of functions from the GLC to successor authorities. In other words, the Secretary of State had to divide the GLC budget roughly between all the successor bodies. This division of the GLC budget was notified to Greenwich and other successor bodies by a Department of the Environment letter of 20 December 1985 which purported to give the final allocations—I emphasise "final"—of the GLC budget. Multipliers were determined in the RSG report using that allocation.
The allocation for Greenwich was £22·779 million. But Greenwich has to spend £24 million on ex-GLC services and estimates that expenditure of not less than £26 million is required. It does not have the resources to spend at that level. The Secretary of State now proposes to change his final allocation for Greenwich and to reduce it to about £20·513 million. Greenwich is complaining that it is extraordinarily difficult to get accurate information from the Secretary of State and the Department. The original allocation, which Greenwich maintains is inadequate, will be further reduced.
As the original allocation was inadequate, there were losses for Greenwich ratepayers as a result of GLC abolition, contrary to the stated intention of various Secretaries of State. It is those losses that the Secretary of State now proposes to increase. The effect of his proposals is to withdraw £3·822 million of Greenwich's 1986–87 block grant entitlement, leaving a net figure of £49·286 million. Greenwich ratepayers will have to find a further £3·822 million. This is in addition to the losses which they have already suffered as a result of GLC abolition.
Grant is, in effect, being taken away from Greenwich and other inner London boroughs and given to Bromley, Barnet, Sutton and other outer London boroughs. We understand that process and we appreciate the politics involved. Those boroughs are either Tory boroughs or boroughs in which the Conservative Government believe that they stand a chance of gaining control. Richmond is one of the obvious examples. The Government believe that they can fiddle the rate support grant settlement in such a way as to benefit themselves politically. That is fair enough. Let us all be open about it. That is part of the pork barrel. The pork barrel is attractive, if one's snout is in it, but is not much fun if one sees someone else snuffling up all one's resources. That is why Greenwich and Newham are complaining. But the wheel will turn and our snouts will be in the pork barrel before long.
Greenwich is complaining bitterly about its treatment and will challenge the redetermination of the multipliers by the Secretary of State in court on 29 January. If the courts decide that the Secretary of State has acted unreasonably or unlawfully in the redetermination of

multipliers for the 1986–87 rate support grant settlement, will Greenwich be able to benefit from that judgment? If so, Greenwich can proceed happily with this case because, as in the first part of its case, the borough feels that it is on strong ground.

Mr. Michie: Once again, we are trying to defend the local government system which has suffered seriously for many years. Fear about the Secretary of State's powers worries us all, whatever our political persuasion. As our amendments show, we are trying to take away the tremendous powers of the Secretary of State. He will be not only above local authorities, but above the law. That is against what I believe to be natural justice.
Places such as Sheffield could be wronged. I believe that they will be. It may be put in a position in which it cannot carry out its statutory obligations. That will certainly be the case with the south Yorkshire fire service.
7.45 pm
If those circumstances arise and the Secretary of State is given so much power, they will act against the natural justice of people who are trying not only to defend services but to carry out the duties vested in them by central Government.
The Secretary of State wishes to ignore the statistics that have been given by local government on its needs and obligations. He wishes to ignore the massive unemployment in Sheffield, the fact that it has the highest number of old-age pensioners, and the fact that it cannot carry out its statutory duties. Are we to understand that, whatever judgment is made by the Secretary of State, there will not be the right of appeal to the courts? That is what I understand to be the position.
The Sheffield city council told the Secretary of State that his expenditure limit implies "unachieveable economies". It predicted "disastrous cuts" in services. It asked him to raise its spending capacity from £258,915,000 to £295,832,000. In its case for appeal the council made many points, most of which have been ignored.
What should the council do in those circumstances? Does it just say, "OK. We shall just sit down and let things happen". No, of course not. Local authorities are just as responsible for carrying out their duties as any other organisation, especially this House of Commons.
Sheffield's GRE for 1986–87 is £33·2 per head below the metropolitan district per capita average leading to a GRE reduced by £17·9 million and a loss of grant of £31·4 million on budgeted spending in 1986–87. Was that taken into account? No, it was not.
Does not the Secretary of State believe that we can appeal against such judgments, which are made on an irrational basis? Does it mean that, despite the fact that the European Parliament, in a recent study, found that of the 102 largest urban areas in Europe the Sheffield-Rotherham conurbation ranked as one of the lowest in terms of social and economic health, it is not recognised by the Secretary of State? Does that mean that local authorities should not have the right to appeal somewhere, to try to put their case before a court in another area, to determine that they can carry out their duties? Is that what the Bill is all about? Is that what the Secretary of State wants? If a local authority has the highest youth unemployment, does that mean that it does not have the right to appeal and argue a case? Such powers are dangerous not only for the Secretary of State, because


sooner or later he will drop another danger and when he gets a problem will have to change his policy yet again, but for democracy generally.
Therefore, I hope that the Secretary of State will not take the powers proposed in the Bill because he does not need them unless, as someone once suggested to me, the Conservative Government cannot abide the freedom of local authorities because it frustrates their ultimate policy. That is to pay the rich and to take from the poor. Unfortunately for the Government, many local authorities are prepared to take from the rich and defend the poor. More and more power is taken away and there is much more centralism and dictatorship. I hope that the amendment is successful.

Mr. Spearing: These amendments seek to ameliorate the draconian powers that the Secretary of State is taking for himself in the Bill. I cannot see any reason why these relatively mild ameliorations should not be accepted. I do not think that the Secretary of State has understood the powers that he is taking in clause 1.
Some years ago, I was involved in the hearings of a railway closure tribunal. The chairman of the tribunal gave a ruling on what an Act of Parliament meant. He said, "The Minister of Transport says that that part of the Act does not mean what counsel says it means". Someone said, "That is nonsense. The Secretary of State cannot interpret the Act. Only the court can do that." As I understand it—the Secretary of State will correct me if I am wrong—that is not true in relation to this legislation. I thought that that constitutional principle applied to the liberties of the individual—in this case, a ratepayer in respect of certainty of local government, its efficiency and effectiveness. The Minister for Local Government knows from his experience that, unless one plans ahead in local government, there will not be the consistency and efficiency of operation which we all want. The liberty of the subject and of the bodies corporate is under threat. That interpretation has not been breached—my hon. Friend the Member for Copeland (Dr. Cunningham) mentioned 1668, an important year—except, conceivably, in time of war, and I doubt whether even then it has been breached. But that happens in the Bill.

Mr. Ridley: I do not know whether the hon. Gentleman was here when I spoke to the amendment, but, even if he was, he does not seem to have heard me. I think that, if he had listened, he would agree that he has the wrong brief.

Mr. Spearing: I shall certainly read what the Secretary of State said. But I am not speaking from a brief. I am speaking from the heart and from common sense about what concerns the majority of people in recipient areas.
The Secretary of State is trying to operate a system which was initiated under the Local Government, Planning and Land Act 1980. The hon. Member for Eastbourne (Mr. Gow) is wrong. In Committee, we made it clear that this system would not work. The multipliers, which have been mentioned by my hon. Friend the Member for Islington, South and Finsbury (Mr. Smith), were introduced. We said that the combination of the operations introduced by that legislation would be impractical.
Year by year, Act by Act, the Secretary of State has tried not only to make the legislation work but to operate it politically. My hon. Friend the Member for Newham,

North-West (Mr. Banks) has made that clear. We can understand that approach up to a point. But in trying to operate those two desiderata, one clearly comes up against court judgments. The local authorities, in trying to get out of the lobster pot into which the Secretary of State put them, clearly used their constitutional rights to go to the courts. Over a period, there is greater and greater court activity over a wider interface of statutes. The more statutes there are, the wider the interface and the greater the potential for appeal to the courts. That is what has happened. There have been court cases because of that.
Now there is only one way out, and the Secretary of State has taken it. The right hon. Gentleman says that this is not just a rate-capping measure; it is a court-capping measure. He says, "I am going to stop the nonsense of the continuous appeals and proliferation of legislation. I shall determine what the law is in future." That is the purpose of clause 1. In these amendments we are saying that we do not like that, but it should not apply at least in respect of those cases which are already in train. I should have thought that anyone with any common sense would say, "Even if we agree, as the Minister for Local Government clearly does, with the general principle of court capping, it should not be done retrospectively in those cases already in train."
Of course, there is a consquential problem. Let us suppose that the court cases in train decide in favour of the local authorities and not in favour of the Secretary of State—which would not surprise any of us in view of the history of these matters. The Secretary of State is then left with an anomaly. The law is interpreted by the courts, and that may be contrary to the contents of the Bill. One borough—perhaps Greenwich or Islington—may have an apparent undue advantage in terms of the law. The Secretary of State says, "We cannot have that because the new laws which I am imposing on local authorities are meant to be uniform." He is left with only one alternative—he must make not only prospective determinations of the law, which is bad enough, but determinations in respect of cases that are in train. We say that at least there should be some amelioration by including these amendments in the Bill to protect the rights of the subjects involved in cases already in train in the courts.

Mr. O'Brien: I wish to speak to this group of amendments because of my experience in local government and the problems of those serving local government—officers and members—who are trying to provide services for the people in their communities. The laws that govern local authorities handicap and hinder their work. If the Bill is passed in its present form, there will be further problems for those who serve local government. We must ensure that legislation is so framed that it gives local authorities and those who serve them the best possible chance to make sure that the service which they provide is in the best interests of their communities.
I refer especially to amendment No. 2A. The Government are trying to take from local authorities the opportunity to obtain justice. The Secretary of State wants to make decisions which would not be permitted by a court.

Mr. Ridley: I do not think that the hon. Gentleman can have heard my speech on the amendment when I made it clear that that is not the case. Did he hear what I said?

8 pm

Mr. O' Brien: We all heard what the Secretary of State said. If what he said was true, why does he not accept the amendment which would clearly show that his intention is not what we believe it to be? If the Secretary of State is saying that we are wrong, I put it to him that the amendment would clear away all elements of doubt. Therefore, I ask him to accept amendment No. 2A.
It is a fact that the Government's policy of controlling local government finance is now a complete shambles and a complete mess. As a result of the Government's proposals for controlling rate contributions through the rate support grant, the fire and civil defence authority in west Yorkshire is experiencing great problems in trying to provide adequate services and protection in the coming year. The Secretary of State is fully aware of the problems facing that authority and also of the tremendous shortfall in the resources that are needed for the coming year if the local authority is to provide adequate services.
If the legislation is allowed to continue in its present form, and if this group of amendments is not accepted, the problems that face the authorities in west Yorkshire—especially the police authority—will intensify and the services that are provided to the local communities will be reduced.
If this group of amendments is accepted, the problems that face my colleagues who serve those various authorities, including the police authority, will be eased. It would also give them a ray of hope and lighten the problems that they have reported to the Secretary of State.
If the Bill is enacted, the services that they are expected to provide will no longer be available. The Bill comes from a Government who talk about reducing crime and providing better services and protection to local communities, but those things are not happening in west Yorkshire because of the Secretary of State's attempts to rate-cap and control the finances of local authorities.
As I have said, the Government's control of local authority finance is a complete mess, but the Bill is not confined to sorting out that mess. It gives substantial additional powers to the Secretary of State to intervene in local authority accounting, to introduce rate capping for 1987–88 by formula, and to exclude the courts from reviewing those decisions.
Transport authorities in west Yorkshire are being affected and elderly and infirm people who rely on public transport will also be affected by the proposals that are at present under consideration. The Bill will worsen the conditions under which the transport authorities in west Yorkshire have to provide public transport. If this group of amendments is not accepted, my colleagues who try to provide those services in west Yorkshire will encounter greater difficulties in ensuring that a continuous service is provided to the communities in the five metropolitan districts of west Yorkshire.
A recent announcement referred to the amount of money that would be available for highway and road purposes in my area, and especially in the metropolitan district of Wakefield. Rate capping and cuts in resources will mean that local authorities will be unable to provide the necessary protection and services to the community. That is why we believe that the powers that the Secretary of State is taking further control the services that local government wishes to provide. On more than one occasion local electors have demonstrated through the ballot box

that they require those services that the Labour groups on local authorities have included in their manifestos, I refer especially to Leeds and Wakefield. However, the Secretary of State wishes to take unto himself powers to intervene in local authority accounting, and to introduce rate capping for the current year.
There is such confusion about the current position that it is wrong for the Government to use the Bill to impose even more arbitrary solutions. The Secretary of State should think carefully about the issues raised in the Bill and about the points raised by my hon. Friends on this group of amendments because those comments are relevant to the services that local authorities wish to provide.
In the area that I represent, and especially in Wakefield, we wish to help the 16 per cent. of the population who are unemployed. In this legislation, the Secretary of State is causing further problems to those authorities that are trying to provide jobs and job opportunities for the unemployed, and especially for the young unemployed who have never had a job, by trying to take substantial additional powers to intervene in local authority accounting.
Amendment No. 2B states that the Secretary of State should report,
setting out the dates, and any other details which he may consider relevant, of the legal advice that was received by him prior to the introduction of this Act with respect to the legal interpretation of 'relevant' and 'total' expenditure for Rate Support Grant purposes.
As a Member of Parliament representing an area of high unemployment, with public transport problems and facing the danger of a lack of proper protection and of police forces being unable to carry out their full responsibilities and duties to communities, I believe that Members of Parliament should have an opportunity to make representations on behalf of the people that we represent and our local authorities. We should be able to give a full and concise report of how those authorities will be affected by the "relevant" and "total" expenditure for rate support grant purposes.
If the House does not accept the amendments that we propose, the facilities available to local authorities will be worsened. The relationship between the communities and the local authorities which serve them will deteriorate because the necessary services will not be provided. Therefore, this group of amendments should be given serious consideration. The Secretary of State should take on board all the points that have been made by those hon. Members with local authorities that are experiencing difficulties. Every week, hon. Members meet their constituents and hear their complaints about lack of services. The lack of services is due to the attitude of the Secretary of State. He will not provide the resources necessary to enable local authorities to carry out the services. I ask the Secretary of State to consider seriously the group of amendments and to support the amendments that have been proposed by my colleagues.

Mr. Andrew F. Bennett: I apologise to the Committee for not having heard the Secretary of State. I wish to pursue the question of the relationship between the Bill, the amendments, and the work of the Select Committee and the Joint Committee on Statutory Instruments. I have looked with some care at the sections dealing with the question of the Secretary of State taking additional powers. I can understand that he is trying to stop judges


making decisions that he might not like. Since he has got the law wrong on several occasions, I can appreciate that he may want to eliminate judges. However, will he explain whether he also intends to eliminate the scrutiny of the House? Most of the rate support grant legislation is implemented by orders. The first line of clause 6 says:
For the purposes of any order made before the passing of this Act".
As I understand it, the orders are normally scrutinised by the Joint Committee or the Select Committee, depending on whether they are affirmative money orders or whether they are simply enabling——

Mr. Chris Smith: Is it not the case that that applies not only to orders made before the enactment of the Bill, and that it may well include orders made after the enactment of the Bill under clause 6(3) which relates to the designation of an authority for rate capping for the financial year 1987–88? The Secretary of State will have to make orders to implement the formula contained in schedule 2 as part of that exercise of rate designation, and those orders will, by their very nature, have to be after the passing of the Act because they will have to enshrine the formula that is before us for the first time as part of the Bill.

Mr. Bennett: As I have said, the problem is that implementation of the legislation has to be done by orders and the orders are scrutinised by the Select Committee or the Joint Committee. Our terms of reference as a Committee are very narrow. We are supposed to see whether the legislation is legal. We are entitled to see whether it needs elucidation. We do not usually take that too far, especially in this sort of area since it is difficult to find an order on rates that is easy to understand. The Committee also has various other powers.
Having looked at the order, especially on the basis of advice from Speaker's Counsel and others, we are then entitled to make a report to the House and, if it is the Joint Committee, to the House of Lords. It is the normal procedure that if we draw the House's attention to something that is ultra vires, the Government withdraw it and bring in a new order, usually with an an apology. We have very little power to force the Government to do that but it would be foolish for the Government to continue with an order that has been pointed out to be ultra vires because they know that it could be subject to a challenge in the courts fairly quickly and that the courts would cause far more trouble for the Minister than we as a Committee. Therefore, the back-up for the Select Committee and the Joint Committee is the fact that, although we can produce reports, anyone who is aggrieved can challenge the order in the courts.
8.15 pm
As I understand the Bill, especially clause 4(6) and clause 6(4), the Government are taking away the powers of judges to overturn decisions. If the Government had made it clear by saying that anything that was deemed to be illegal was in fact legal, which is in effect what they are trying to do, it would have bound the Select Committee and the Joint Committee. However, the Government are not saying that anything that is ultra vires shall be intra vires. They say that that will apply only if they are challenged in the courts. Therefore, the Government are taking away from us the back-up power of the courts.
The Secretary of State may say that that does not apply because the Government will be able to quote this Bill and

be able to make all the orders as a result of this legislation. I accept that the citations for statutory instruments that will be prepared in the future will include previous legislation plus this legislation. However, I am not sure how one would put this legislation into the citations if the statutory instruments are made before the Bill is enacted. That presents problems with the orders that have been laid this year insofar as they will be made legal by the legislation. It will be the duty of the Select Committee or the Joint Committee to report on the orders if they are ultra vires.
I should like an explanation from the Secretary of State as to how this Bill makes the statutory instruments legal as opposed to taking away the power of the courts to rule that they are illegal. The problem of the statutory instruments is another illustration of the way in which the Government now seem to want to go beyond any legal framework that we have been used to in the House and to be able to say, "This is the money we are giving out and we do not want to face any challenge." If that is the procedure that the Government want, why shroud it in complications?
The Secretary of State should say honestly, "This is the way I am going to dish out the money. It has nothing to do with any principles of need or resources within a community. It is purely my arbitrary decision as Secretary of State. These are the authorities I like and these are the authorities I dislike." Why put so much mumbo-jumbo and confusion into the system when that is basically what the Secretary of State is doing? Why does he not come clean and make it clear that he is handing out the money to the authorities he likes, that he is not giving it to the authorities he dislikes, that it is purely arbitrary and that there is no rhyme or reason to it? Perhaps then he will go a little further and say that part of the reason for the legislation, as I suggested previously, is that he is doing his best to discredit the system of rates in Britain. He wants to demonstrate that it is complicated and absurd, so that he will build up more pressure for the abolition of rates.
I am not a great enthusiast for the rates, but I suggest that, until the Secretary of State finds an alternative way of raising local finance, he is setting out to undermine local democracy. As long as he cannot come up with a better alternative that retains the democratic right of local people to raise money and to receive an allocation of national resources to meet the needs of their locality, he is continuing to undermine local democracy. The more he undermines local democracy, the more he is paving the way for the undermining of national democracy.
The Government seem to be claiming that they cannot trust local politicians and that appears to be the basis of the Secretary of State's allocation of resources. He seems to disapprove of some local authorities. He does not trust some local politicians and he is critical of them. As long as the Secretary of State continues to undermine local politicians in that way, he is claiming that the electorate cannot be trusted. The logic of that is that, if one cannot trust the electorate to elect local councillors, why should the electorate be trusted to elect anyone else?
The Secretary of State is undermining democracy. He will have a great deal to account for in future in the way in which he has damaged the whole concept of local democracy. When the Secretary of State replies, I hope that he will make it clear that he believes in local democracy and the rights of people to elect people with whom he disagrees. I hope that he will state that he


believes that some people must put up with decisions that they do not like and that, on occasion, local authorities will want to spend money in ways that do not meet with his approval; yet they have every right to do that, because they have been elected.
As the Secretary of State is seeking to make the legislation bypass the courts, can he tell us whether he is trying to make it bypass the Standing Orders of the House that ensure the proper scrutiny of statutory instruments? If he is removing the back-up power of the courts, what power does he intend the Joint Committee on Statutory Instruments to have to draw attention to the fact that some of his regulations will be ultra vires? I hope that the Minister can satisfy me at least on my second point, if not on my first.

Mr. Allen McKay: I want to reinforce the argument by introducing a voice from south Yorkshire. I will come later to such items as the fire service and transport in south Yorkshire.
Like my hon. Friend the Member for Denton and Reddish (Mr. Bennett), I want to refer to the erosion of democracy that has taken place in the House over the past five or six years. A main theme of our debates recently has been the erosion of democracy—the centralisation of power through the removal of power from local government to central Government. The Bill is a further step in that direction.
The Secretary of State believes that he is above the law. Indeed, if he is not already above the law, he seeks to make himself so. Under the provisions in the Bill, those local authorities which believe that they have been wronged will no longer have the opportunity to take the Secretary of State to court.

Mr. Ridley: indicated dissent.

Mr. McKay: The Secretary of State is shaking his head. However, the fact remains that we could not have conceived of this situation 12 months ago. However, it has happened because the Secretary of State and his predecessors decided for, some reason or other, that central Government know best. They decided not to trust the local electorate who choose the people to look after their area. Central Government are now determining what should happen in the areas.
I have no argument with a Government of any political persuasion deciding that they have a certain amount of money to give to local government. That is a decision for central Government. However, I would probably argue about the sum that they allocated, but that is a different matter. Not only have the Government decided that they will not allocate the money to local government; they have decided that local government will not be able to raise the money to make up for what it has lost.
The Government have gone a step further. If local government decides to challenge the Secretary of State in court, the Secretary of State has refused to allow local government that right. The Bill will make unlawful what was a lawful procedure before it was introduced. It is only a short step for the Secretary of State to carry on from that position and make a similar provision in future. The Government have taken away local government redress against central Government diktat.
I have always believed, and will always believe, that the law of this country is divorced and separate from any

entity. It must be so to act impartially. I may not agree with some of the conclusions reached by the law, but I agree that the law should have the ability and the right to act impartially. However, the Bill contains provisions which will niggle at the edges of that right and the Committee should consider what is happening.
Any Secretary of State may adopt the kind of powers included in the Bill. However, I am concerned about the principle and why the Secretary of State has chosen to use the power. He has chosen to adopt these powers simply because he was wrong in the past, was challenged and lost. He has determined that certain decisions will not be taken.
I want to consider a sample from my local authority in respect of the determination of the figures. The figures are determined wrongly. Under the provisions in the Bill, a local authority will not be able to take the Secretary of State to court over the cuts that he has caused. I will consider the figures in detail later because I want to highlight the way in which the figures have gone wrong. However, we must accept the amendments because, by not accepting them, we accept a dilution of the present free and democratic structure.

Mr. Tony Banks: I want to consider amendment No. 85.

Mr. Ridley: The hon. Gentleman has spoken before.

Mr. Banks: Yes; this is the second time that I have addressed the Committee and I understand that I am in order. The Secretary of State seems to imply that it is surprising for an hon. Member to speak twice. I am not speaking twice because I want to drone on or because I am enamoured by the sound of my own voice. When I spoke previously I referred specifically to the Greenwich case. I do not want to tax the Committee, but I want to make some general points about this part of the Bill and amendment No. 85 will enable me to to that.

Mr. Allan Roberts: It might make for a better debate if some Conservative Members spoke for the first time or if Tory Members attended this important Committee. Only the hon. Member for Cheltenham (Mr. Irving), with his particular interest and passion for local government and local government democracy, who is not famous for supporting the Government, is in attendance. The only other Conservative Members present are Ministers and their parliamentary private secretaries. That is how lightly the Conservatives treat this important Bill.

Mr. Banks: I entirely agree with my hon. Friend. However, it is clear from the languid pose adopted by the hon. Member for Cheltenham (Mr. Irving) that he is not evincing much passion in respect of the Bill. However, my hon. Friend the Member for Bootle (Mr. Roberts) has made the point. This Bill is not the most fascinating topic that we could come to grips with. The empty Conservative Benches and the not too full Opposition Benches bear witness to that. We should speak the truth in Committee as we should in the House. The truth is that this is pretty boring stuff—and that includes my speech.

Mr. Michie: I agree with my hon. Friend's last point. However, does he agree that it is not really fair to criticise Conservative Back-Bench Members for not being present as they do not really agree with the Bill but are frightened to say so?

Mr. Banks: I wish that that was the case. The truth is that we simply do not have the expertise in the House to deal with the constant interferences in the day-to-day affairs of town halls, nor do we have the interest.
The Conservative Benches are devoid of human life form. I exclude, of course, those on the Front Bench. It would be too unkind to say that they did not correspond with a known life form. When amendment No. 2A is decided on, hundreds of hon. Members will flood in, but none of them will know what has been discussed. They will not have the foggiest idea.

The Temporary Chairman (Miss Betty Boothroyd): Order. This is an abuse of the Committee when there are so many amendments under consideration. I understand that the hon. Member wishes to speak to amendment No. 85.

Mr. Banks: I do, but I was tempted into a far more interesting area of discourse and speculation. If my hon. Friends do not expose me to the one thing which I cannot resist, which is temptation, I shall deal with amendment No. 85 which proposes, in clause 4, page 5, line 7, at end add
'save those decisions of a court in respect of litigation before the courts on 12th January.'.
We are asking the Secretary of State to make exceptions of local authorities which have already started litigation in respect of previous decisions made by the Secretary of State. That seems perfectly reasonable.
Ministers and Conservative Members always say that local authorities should be aware of the sums of money that they spend on behalf of their ratepayers and that they have a fiduciary responsibility and should not waste money. That takes us into political opinion and speculation. No responsible lawyer in a local authority encourages a local authority to proceed in the courts if it is a complete waste of time because there is no chance of success. No legal department was aware that the Secretary of State would introduce the Bill and change the name of the game in respect of previous rate support grant settlements.
In fairness to the legal advice given by legal officers, and in fairness to ratepayers, who have already committed a great deal of money to briefing counsel and preparing the necessary documents—we know how much that costs—it would seem fair that local authorities should be allowed to proceed. They might get some advantage from the amendments whereas others might not. I do not know whether that takes us into arguments about hybridity, but it seems only equitable that local authorities should be able to proceed with the litigation that they started before 12 January—the date of the Bill's Second Reading.

Mr. Straw: I congratulate my hon. Friend the Member for Newham, North-West (Mr. Banks) on introducing some humour into the debate—a difficult task bearing in mind the subject matter. Amendment No. 2A addresses the proceedings that Greenwich has brought against the Secretary of State. My hon. Friend the Member for Newham, North-West went into some detail about how Greenwich would be adversely affected if the Bill went through unamended. I do not want to repeat everything that he said in his first speech but I should like to put some points on the record.
First, Greenwich is a relatively low-spending authority. Its expenditure per head—I speak from memory—was

£331 in 1985–86, some £150 per head less than Hammersmith and Fulham, which was then Conservative-controlled. It was always a grave injustice to Greenwich that it should have been so rate-capped. As my hon. Friend the Member for Newham, North-West said, Greenwich was rate-capped and suffered some quite gratuitous penalties. The first concerned Bromley, which complained to the Secretary of State about one year ago that it was not getting enough allowance in rate support grant terms for taking over additional highways on abolition of the Greater London council. The then Secretary of State decided to give Bromley the money and take it away from other authorities. Greenwich lost £3,828,000 of grant in 1986–87.
Secondly, Greenwich received much less for the, GLC services that it took over than the cost of those services. It estimates the cost at £24 million whereas it has received only £20·5 million in grant. There have been other problems, including an allowance of only £138,000 for expenditure in respect of land drainage, whereas it has had to pay out £769,000 over which it has had absolutely no control.
Greenwich made its rate-cap challenge. The Secretary of State said that Greenwich won the rate-cap challenge on something that was not central to the points that it was taking to court. That is the nature of court action. One sends out about five shots and scores one hit. It is not for the Secretary of State to complain about that as it is entirely legitimate and how the courts work. Greenwich won its action as, we believe, Islington would. The Secretary of State consented to judgment.
I hope that when we debate schedule 2 and clause 7, the Secretary of State will have the grace to accept that it was wrong to rate-limit Greenwich under the legislation, as everybody else thought it was. If the legislation had stood, the Secretary of State would not have been able to continue to rate-cap Greenwich. He has said that the only purpose of the Bill is to make the law what everybody thought it was, so it must be wrong to continue to rate-cap Greenwich.

Mr. Ridley: That is an absurd argument. Does the hon. Gentleman not realise that, on that analogy, I could not rate-cap anybody or pay any rate support grant? He is asking whether, just because he is chummy with Greenwich, I make an exception for it.

Mr. Straw: I am saying that Greenwich took a court action against the Secretary of State on a perfectly sound point and the courts found in favour of Greenwich and that that decision ought to be allowed to stand.

Mr. Ridley: The courts would have found that there was no basis whatever for the definition of total expenditure, and therefore any case which was brought on the subject of total expenditure would have failed. The hon. Gentleman does not realise that Greenwich did not bring a case on the total expenditure point—it just happened to come up.

Mr. Straw: Greenwich could not possibly have won the point unless it pleaded it. There is no way in which the court could have made a decision on a point unless it was argued before the judge. Judges do not normally tell plaintiffs that they disagree with the points that they have raised and that there is a better one, and this is what it is. Greenwich was well advised, took a point and won.

Mr. Chris Smith: I apologise for interrupting my hon. Friend in his flow but is not the precise point as it applies to both Greenwich and Islington the fact that in the one case the Secretary of State was found to be at fault by the court and in the other case would have been found to be at fault because of the problem relating to total expenditure? However, the nub of both cases is different from the point relating to total expenditure. The real issue in relation to Greenwich was multipliers and in relation to Islington it was the 12·5 per cent. figure above GREA. Introducing this legislation, which the Secretary of State claims has to do with total expenditure, the Secretary of State has managed to include both authorities under the legislation and ignore those other points which the authorities legitimately raised.

Mr. Straw: I think that the implication of my hon. Friend's point is that if Greenwich had had the chance to argue properly the multiplier issue it might have won. Similarly, if Islington had had the chance to argue that its GRE is below the 12·5 per cent. trigger point, it, too, would have won. I agree with my hon. Friend that if the two cases had been allowed to be argued on the central merits that the plaintiffs have raised, those authorities would have won.
Let us turn to the more serious aspects of this group of amendments as it relates to clauses 4 and 6 of the Bill. Clause 4, in respect of the rate support grant, and clause 6, in respect of the Rates Act 1984, seek to validate decisions which are taken by the Secretary of State before the passing of this Act and to exclude the Secretary of State from any subsequent court action in respect of decisions that he has made. Given that the ostensible and innocent purpose of the Bill is to clear up a legislative mess—a mess of the Government's making going back over seven years—one can understand why the Secretary of State is seeking to validate decisions which had been made on the basis of the law as everybody thought it was but, as it turns out, was not. Even if we do not agree with the detail of the Bill, we can understand why the Secretary of State is seeking to do that.
However, having validated such decisions, the Secretary of State then seeks to exclude the courts from checking whether the newly validated decisions have been made in accordance with the law. The Secretary of State seeks to make light of the decisions which he can make under clauses 4 and 6 of the Bill. It is important for us to understand the wide nature of the powers which the Secretary of State can exercise under these clauses and in respect of which he is not subject—as he hopes—to any kind of check from the courts.
Clause 4(2) defines the relevant provisions which are set out in 4(1) as:
Anything done by the Secretary of State before the passing of this Act for the purpose of the relevant provisions in relation to any of the initial years or intermediate years shall be deemed to have been done in compliance with those provisions.
The relevant provisions are part VI of the 1980 Act, section 8 of and schedule 2 to the Local Government Finance Act 1982, sections 2 and 3 of the Education Act 1986 and section 2 of the Rate Support Grants Act 1986. The Secretary of State is aware that part VI of the Local Government, Planning and Land Act 1980 and a further substantial chunk of that Act deal with the whole structure of the present rate support grant. They deal with matters such as clause 53.

Introduction of new system of rate support grants.
Clause 54
The aggregate amount of rate support grants.
Clause 55
The domestic rate relief grant.
Clause 56
The block grant.
There is a great chunk on the block grant.
Clause 57
Determination of grant-related poundage and grant-related expenditure.
Clause 58
Principles for determination of grant-related poundage.
Clause 59
Adjustments of distribution of block grant.
Clause 60
The Rate Support Grant Report.
Clause 61
Supplementary reports.
Clause 62
Adjustment of block grant total.
Clause 63
Adjustment of block grant in connection with education, etc.
Clause 64
Special provisions for Metropolitan Police District.
I have read those titles out to illustrate to the Secretary of State and my hon. Friends the breadth of powers concerning which the Secretary of State is having separate provisions written into the Bill to validate all past acts.
8.45 pm
The other powers are included in section 8 and schedule to the Local Government Finance Act 1982. Schedule 2 is all to do with the block grant for the receiver of the Metropolitan police. Other powers are contained in sections 2 and 3 of the Education Act 1986 and, to cap it all, section 2 of the Rate Support Grants Act 1986. My hon. Friends will recall that that Act was supposed to be the final solution to the unlawfulness and the lacunae of the 1980 Act. That Act states
As respects determinations made under section 59
I have just read out that section—
of the said Act of 1980 after the passing of this Act the following provisions shall have effect instead of subsection (6)(a) of that section and section 8(3)(a) of the Local Government Finance Act 1982.
Under clause 6 of the Bill the Secretary of State is seeking to validate any decision which he makes in respect of the Rates Act until the passing of this Bill, which may take place in March or April. The Secretary of State has sought to suggest that as far as clause 4 is concerned the decisions which are being validated are decisions which he has already made but he must accept that as far as the Rate Acts are concerned these decisions could be prospective as well. In clause 6(2) and (3) it states:
(2) Anything done by the Secretary of State before the passing of this Act for the purposes of Part I of the 1984 Act in relation to the financial year beginning in 1985 or that beginning in 1986 shall be deemed to have been done in compliance with the provisions of that Part.
(3) For the purposes of section 7 below and Schedule 2 to this Act—

(a) any designation of an authority under section 2 of the 1984 Act in relation to the financial year beginning in 1987, and
(b) any determination and notification under section 3(1) and (3) of that Act of a level for an authority's total expenditure in that year,

shall, if made before the passing of this Act, be deemed to have been made in compliance with the provisions of Part I of the 1984 Act.


Clause 4 states that the judge-proof limit relates only to 4(1) but in clause 6 the judge-proof limit relates to all the powers which the Secretary of State has taken. In clause 6(4) it states:
(4) This section shall have effect notwithstanding any decision of a court (whether before or after the passing of this Act) purporting to have a contrary effect.
It is extremely dangerous and unnecessary for the Secretary of State to take the powers provided under clause 4(6) but at least I half understand his arguments. But what is his argument for taking the powers under clause 6(4)? It does not relate to past Acts but relates to the designation of individual authorities. Do individual authorities that have been rate-capped have a right to go to the court if they believe the Secretary of State has exercised his power unlawfully? Rate-capping has an adverse effect upon individual authorities and it is possible that the Secretary of State or his legal advisers may have made a wrong decision in respect of designation, the determination of the expenditure limit or total expenditure.

Mr. Dobson: It is more than likely.

Mr. Straw: In those circumstances, is it not right that the authority should be able to go to court? What possible administrative mischief is the Secretary of State seeking to avoid by preventing authorities from going to court? What is he scared of, given that he says that in other respects he is ready and willing to let local authorities go to court to challenge his decisions?
On the general issue of these judge-proof clauses the Secretary of State wants to brush aside the enormity of what he is doing. I cannot examine the inner workings of his mind and it may be that he believes that what he is doing in clauses 4(6) and 6(4) is innocent and trivial. It is neither innocent nor trivial. The only ways in which the rule of law can be protected—and all of us live by the rule of law—is first by an elected Parliament and secondly by having courts to supervise the decisions of the Executive to ensure that the decisions that they make are made fairly and within the law.
I should like to quote from Wade on administrative law. It talks of a leading case called the anisminic case, and says that that case and it sequels were:
The culmination of the judicial insistence, so often emphasised in this work, that administrative agencies and tribunals"—
that includes Ministers—
must at all costs be prevented from being sole judges of the validity of their own acts. If this were allowed, to quote Denning Lord Justice again, 'the rule of law would be at an end.
It then goes on to quote Lord Wilberforce expressing the same idea in different words. In a case in 1933 Lord Atkin said in objecting to what he described as finality clauses in legislation:
Finality is a good thing but justice is better.
Essentially, that is the view that we hold. I should like to quote again from Lord Denning from his work, "What Next in the Law?" In that work he discusses the discretion of Ministers and says that Ministers may sometimes say:
The statute gives me an unfettered discretion. It cannot he challenged in the courts of law. If I should exercise it wrongly, I can be questioned in the House. But the courts cannot restrain me.
Lord Denning goes on to explain how the courts have indeed taken powers to supervise the work of Ministers even where Ministers have sought to preclude that

supervision. He quotes what he said in Laker's case in 1977 which was an action taken against a Labour Minister. It is right that Labour as well as Conservative Ministers should be subject to the courts no matter how uncomfortable the court decisions may be. In that case the court said:
These courts have the authority—and I would add the duty—in a proper case, when called upon, to inquire into the exercising of a discretionary power by a minister or his department. If it is found that this power has been exercised improperly or mistakenly so as to infringe unjustly on the legitimate rights and interests of the subject, then these courts must so declare. They stand, as ever, between the executive and the subject, as Lord Atkin said in a famous passage, alert to see that any coercive action is justified in law. To which I would add: be alert to see that a discretionary power is not exceeded or misused.
The rate support grant legislation contains page after page of discretionary power in the hands of Ministers. Parliament has accepted that that discretion should be given to Ministers. It is a powerful weapon, but as Lord Denning and Wade have said it should be subject to the supervision of the courts.
The Secretary of State is breaching a major constitutional principle. He is not breaching it for very much because he seems to be saying that this Bill has now got the law straight. If the law is straight, there need not be any legal challenges and he need not not make a judgment. If the law is not straight it is essential that the courts should be able to intervene and protect local authorities, the subject, from unjust and arbitrary discretion by Ministers. That is why we object to these provisions and why we shall force them to a vote.

Mr. Ridley: I shall be brief because I have spoken already and I do not want to take up the time of the Committee. As I said to the hon. Member for Birmingham, Ladywood (Ms. Short), I should prefer to deal with the Birmingham point separately. There are amendments relating to it and I shall return to that when the time is reached. I see that the hon. Member for Leeds, West (Mr. Meadowcroft) is not in his place. Many speakers in the debate come and go, but not many listened to what I said on the first occasion. Practically the only one who did so was the hon. Member for Blackburn (Mr. Straw).

Mr. Tony Banks: rose——

Ms. Clare Short: rose——

Mr. Ridley: It is not a matter of whether the hon. Member for Newham, North-West (Mr. Banks) or the hon. Member for Ladywood were here but whether in their speeches they showed the faintest recognition of the points that I have sought to make. The Committee does not have too good a record on that. The hon. Member for Leeds, West and a number of hon. Members missed the point that if one looks at clause 4(1) which must be read in relation to the powers contained in clause 4(6) about judge-proof past actions, one sees that it says:
Anything done by the Secretary of State before the passing of this Act".
It is only in relation to actions taken before this Act was published that anything I do escapes challenge.

Mr. Tony Banks: Passed, not published.

Mr. Ridley: The hon. Gentleman is wrong, because since the Act was published I have done nothing nor will I do anything in the sense of this clause. I have taken no


actions whatever in relation to the rate support grant settlement since the time that I realised it would be illegal for me to do so.

Mr. Tony Banks: It is the Bill which has been published, not an Act, and although the Secretary of State has taken no decisions he must get it quite clear that one publishes a Bill, not an Act.

Mr. Ridley: This does not give me the powers that hon. Members thought it did, that I could affect future things without my decisions being subject to review by the courts. That is not the case because it is only what I have done hitherto which is validated, not what I might do in future.

9 pm

Mr. Spearing: This is the needle point which the Secretary of State picked up during my remarks. Has the right hon. Gentleman not taken the point on board? Will he reply to the point raised by my hon. Friend the Member for Blackburn (Mr. Straw) that clause 6(4) is prospective? The wording of that subsection makes it clear:
before or after the passing of this Act, purporting to have a contrary effect
in respect of the effects of the whole of clause 6 which relates to the complicated provisions in schedule 2. Is that not prospective?

Mr. Ridley: Hitherto, I have been talking about clause 4. I was about to refer to clause 6, which is a rather different point, as I said on the first occasion. I must make it clear to the House that the Bill proposes that rate limitation and a pre-set limitation should be instituted by the schedule, which specifies both the authorities and the rate limits by reference to clause 6(3). That makes the Government's intention absolutely clear.
If the House passes the Bill to become an Act, those authorities and those expenditure limits, as amended or not by Parliament, will indeed be the statute law on rate limitation. Therefore, any concept that there can be a challenge to decisions in the courts is a challenge to Parliament because Parliament will have enacted the legislation and these will be the provisions.

Mr. Straw: rose——

Mr. Chris Smith: rose——

Mr. Ridley: Let me complete my point. Any challenge may or may not take place both as to the designation—the Islington case—and as to any other matter to do with rate capping—the Greenwich case. Whatever happens in those cases, it must be superimposed by the statute power in the Bill to limit the rates or precepts of those authorities, and that must override any court action that takes place beforehand.

Mr. Chris Smith: With respect, the Secretary of State is talking nonsense. Any subsequent challenge to the designation or rate capping of a specific authority would be a challenge not to Parliament but to the exercise by the Secretary of State of general powers that are given to him by this statute and, in part, included in schedule 2, which does not specify individual authorities, except in a number of specific cases. It does not specify actual figures but it specifies formulae that will be subject to a report or an order to be tabled by the Secretary of State giving his administrative decision.

Mr. Ridley: The hon. Gentleman is right. The point made by the hon. Member for Denton and Reddish (Mr. Bennett) is valid, too. Orders will be made after the passage of the Bill, which will be subject to the statutory instruments scrutiny procedures and will have the back-up of the courts, but they will be made under the Act—if, by then, it is an Act—and, therefore, the powers in the Act will enable those orders to be legal, and the courts will have to interpret them, if there is a challenge. They will be made under the powers of this legislation and not under the Rates Act 1984.

Mr. Straw: I refer the Secretary of State to the point that he made a moment ago. He said that the Bill had to be made judge-proof because a challenge to the courts would be a challenge not to Ministers but to Parliament. With great respect, it is a challenge, as it were, to the authority or to the nature of decisions made by Parliament and embodied in statute that forms the basis of every single application for judicial review. If what the Secretary of State said is right, he should argue that there should be no judicial review. Does the Secretary of State not understand that judicial review is about challenging the use of statutes, either by Ministers or by other people who have powers under statute?

Mr. Ridley: The hon. Gentleman still does not seem to understand. If the Bill becomes an Act, the provisions about rate limitations will have statutory force. Does the hon. Gentleman agree with that? If, in some way, there is to be a challenge to the present proposals on rate limitation, it will be prohibited only if the Bill becomes law. Clause 6 will not come into effect until the Bill becomes law. If, on the other hand, the Bill does not become law, there will be no restriction to the right to challenge. If the Bill becomes law, the rate-capping procedures will be as they are in the Bill, and the limits are there, so there is no conceivable point in a challenge that will be overtuned by the Bill. If the Bill does not become law, the challenge will not be upset. Of those Opposition Members who spoke in Committee——

Mr. Andrew F. Bennett: Will the Secretary of State give way?

Mr. Ridley: No, I shall not give way. I have already given way a great deal. A respectable number of Opposition Members did not hear my first speech and can be forgiven for having got it wrong. A less respectable number of Opposition Members heard my first speech but they have persisted in getting it wrong. Furthermore, the hon. Member for Blackburn realised that the Opposition were making a completely bogus point and climbed down.

Question put, That the amendment be made:—

The Committee divided: Ayes 177, Noes 232.

Division No. 58]
[9.05 pm


AYES


Abse, Leo
Benn, Rt Hon Tony


Adams, Allen (Paisley N)
Bennett, A. (Dent'n &amp; Red'sh)


Alton, David
Bermingham, Gerald


Anderson, Donald
Bidwell, Sydney


Archer, Rt Hon Peter
Blair, Anthony


Ashley, Rt Hon Jack
Boyes, Roland


Ashton, Joe
Bray, Dr Jeremy


Atkinson, N. (Tottenham)
Brown, Gordon (D'f'mline E)


Bagier, Gordon A. T.
Brown, Hugh D. (Pro van)


Banks, Tony (Newham NW)
Brown, N. (N'c'tle-u-Tyne E)


Barron, Kevin
Brown, R. (N'c'tle-u-Tyne N)


Beckett, Mrs Margaret
Bruce, Malcolm


Bell, Stuart
Buchan, Norman






Caborn, Richard
McCartney, Hugh


Callaghan, Jim (Heyw'd &amp; M)
McDonald, Dr Oonagh


Campbell, Ian
McKay, Allen (Penistone)


Canavan, Dennis
McNamara, Kevin


Carter-Jones, Lewis
McTaggart, Robert


Cartwright, John
McWilliam, John


Clark, Dr David (S Shields)
Madden, Max


Clarke, Thomas
Marek, Dr John


Clelland, David Gordon
Marshall, David (Shettleston)


Clwyd, Mrs Ann
Martin, Michael


Cocks, Rt Hon M. (Bristol S)
Mason, Rt Hon Roy


Cohen, Harry
Maxton, John


Coleman, Donald
Maynard, Miss Joan


Conlan, Bernard
Meacher, Michael


Cook, Frank (Stockton North)
Meadowcroft, Michael


Cox, Thomas (Tooting)
Michie, William


Crowther, Stan
Mikardo, Ian


Cunliffe, Lawrence
Mitchell, Austin (G't Grimsby)


Cunningham, Dr John
Nellist, David


Dalyell, Tam
Oakes, Rt Hon Gordon


Davies, Ronald (Caerphilly)
O'Brien, William


Davis, Terry (B'ham, H'ge H'l)
O'Neill, Martin


Deakins, Eric
Orme, Rt Hon Stanley


Dewar, Donald
Park, George


Dixon, Donald
Parry, Robert


Dobson, Frank
Patchett, Terry


Dormand, Jack
Pavitt, Laurie


Douglas, Dick
Pendry, Tom


Dubs, Alfred
Powell, Raymond (Ogmore)


Dunwoody, Hon Mrs G.
Prescott, John


Eadie, Alex
Radice, Giles


Eastham, Ken
Randall, Stuart


Evans, John (St. Helens N)
Raynsford, Nick


Fatchett, Derek
Redmond, Martin


Field, Frank (Birkenhead)
Rees, Rt Hon M. (Leeds S)


Fields, T. (L'pool Broad Gn)
Richardson, Ms Jo


Fisher, Mark
Roberts, Allan (Bootle)


Flannery, Martin
Robinson, G. (Coventry NW)


Foot, Rt Hon Michael
Rogers, Allan


Forrester, John
Rooker, J. W.


Foster, Derek
Ross, Ernest (Dundee W)


Fraser, J. (Norwood)
Rowlands, Ted


Freeson, Rt Hon Reginald
Sheerman, Barry


Freud, Clement
Sheldon, Rt Hon R.


Garrett, W. E.
Shields, Mrs Elizabeth


George, Bruce
Shore, Rt Hon Peter


Gilbert, Rt Hon Dr John
Short, Ms Clare (Ladywood)


Golding, Mrs Llin
Short, Mrs R.(W'hampt'n NE)


Gould, Bryan
Silkin, Rt Hon J.


Gourlay, Harry
Skinner, Dennis


Hamilton, James (M'well N)
Smith, C.(Isl'ton S &amp; F'bury)


Hancock, Michael
Smith, Rt Hon J. (M'ds E)


Hardy, Peter
Snape, Peter


Harrison, Rt Hon Walter
Soley, Clive


Hart, Rt Hon Dame Judith
Spearing, Nigel


Hattersley, Rt Hon Roy
Steel, Rt Hon David


Heffer, Eric S.
Stewart, Rt Hon D. (W Isles)


Hogg, N. (C'nauld &amp; Kilsyth)
Stott, Roger


Holland, Stuart (Vauxhall)
Straw, Jack


Home Robertson, John
Thomas, Dr R. (Carmarthen)


Howell, Rt Hon D. (S'heath)
Thompson, J. (Wansbeck)


Howells, Geraint
Thorne, Stan (Preston)


Hoyle, Douglas
Torney, Tom


Hughes, Robert (Aberdeen N)
Wainwright, R.


Hughes, Roy (Newport East)
Wallace, James


John, Brynmor
Wardell, Gareth (Gower)


Jones, Barry (Alyn &amp; Deeside)
Weetch, Ken


Kaufman, Rt Hon Gerald
Welsh, Michael


Lambie, David
White, James


Lamond, James
Williams, Rt Hon A.


Leadbitter, Ted
Wilson, Gordon


Leighton, Ronald
Winnick, David


Lewis, Terence (Worsley)
Woodall, Alec


Litherland, Robert
Young, David (Bolton SE)


Livsey, Richard



Lloyd, Tony (Stretford)
Tellers for the Ayes:


Lofthouse, Geoffrey
Mr. Frank Haynes and


Loyden, Edward
Mr. Sean Hughes.





NOES


Alexander, Richard
Hunt, David (Wirral W)


Ancram, Michael
Hunt, John (Ravensbourne)


Aspinwall, Jack
Hunter, Andrew


Baker, Rt Hon K. (Mole Vall'y)
Irving, Charles


Best, Keith
Jackson, Robert


Biffen, Rt Hon John
Jessel, Toby


Body, Sir Richard
Jones, Gwilym (Cardiff N)


Bottomley, Peter
Jones, Robert (Herts W)


Boyson, Dr Rhodes
Joseph, Rt Hon Sir Keith


Brown, M. (Brigg &amp; Cl'thpes)
Kershaw, Sir Anthony


Browne, John
Key, Robert


Bruinvels, Peter
King, Roger (B'ham N'field)


Buchanan-Smith, Rt Hon A.
Knight, Greg (Derby N)


Butler, Rt Hon Sir Adam
Knight, Dame Jill (Edgbaston)


Chope, Christopher
Knowles, Michael


Cockeram, Eric
Knox, David


Coombs, Simon
Lamont, Rt Hon Norman


Cope, John
Lang, Ian


Currie, Mrs Edwina
Latham, Michael


Dorrell, Stephen
Lawler, Geoffrey


Douglas-Hamilton, Lord J.
Lawrence, Ivan


Fallon, Michael
Lee, John (Pendle)


Farr, Sir John
Leigh, Edward (Gainsbor'gh)


Fenner, Dame Peggy
Lennox-Boyd, Hon Mark


Finsberg, Sir Geoffrey
Lester, Jim


Fletcher, Sir Alexander
Lewis, Sir Kenneth (Stamf'd)


Fookes, Miss Janet
Lightbown, David


Forman, Nigel
Lilley, Peter


Forsyth, Michael (Stirling)
Lloyd, Sir Ian (Havant)


Forth, Eric
Lloyd, Peter (Fareham)


Fox, Sir Marcus
Lord, Michael


Franks, Cecil
Lyell, Nicholas


Fraser, Peter (Angus East)
McCrindle, Robert


Freeman, Roger
Macfarlane, Neil


Gale, Roger
MacGregor, Rt Hon John


Galley, Roy
Maclean, David John


Gardiner, George (Reigate)
McLoughlin, Patrick


Glyn, Dr Alan
McNair-Wilson, M. (N'bury)


Goodlad, Alastair
McNair-Wilson, P. (New F'st)


Gow, Ian
McQuarrie, Albert


Gower, Sir Raymond
Madel, David


Grant, Sir Anthony
Major, John


Greenway, Harry
Malins, Humfrey


Griffiths, Sir Eldon
Malone, Gerald


Griffiths, Peter (Portsm'th N)
Maples, John


Grist, Ian
Marland, Paul


Ground, Patrick
Marlow, Antony


Grylls, Michael
Marshall, Michael (Arundel)


Hamilton, Hon A. (Epsom)
Mates, Michael


Hamilton, Neil (Tatton)
Mather, Sir Carol


Hampson, Dr Keith
Maude, Hon Francis


Hanley, Jeremy
Maxwell-Hyslop, Robin


Hannam, John
Merchant, Piers


Hargreaves, Kenneth
Meyer, Sir Anthony


Harris, David
Mills, Iain (Meriden)


Haselhurst, Alan
Mills, Sir Peter (West Devon)


Havers, Rt Hon Sir Michael
Moate, Roger


Hawkins, C. (High Peak)
Monro, Sir Hector


Hawkins, Sir Paul (N'folk SW)
Montgomery, Sir Fergus


Hawksley, Warren
Morris, M. (N'hampton S)


Hayes, J.
Morrison, Hon P. (Chester)


Hayhoe, Rt Hon Sir Barney
Moynihan, Hon C.


Hayward, Robert
Mudd, David


Heathcoat-Amory, David
Neale, Gerrard


Henderson, Barry
Nelson, Anthony


Hickmet, Richard
Nicholls, Patrick


Hicks, Robert
Onslow, Cranley


Higgins, Rt Hon Terence L.
Oppenheim, Phillip


Hill, James
Ottaway, Richard


Hind, Kenneth
Page, Sir John (Harrow W)


Hirst, Michael
Page, Richard (Herts SW)


Hogg, Hon Douglas (Gr'th'm)
Parkinson, Rt Hon Cecil


Holland, Sir Philip (Gedling)
Patten, J. (Oxf W &amp; Abgdn)


Holt, Richard
Pawsey, James


Howarth, Alan (Stratf'd-on-A)
Pollock, Alexander


Howarth, Gerald (Cannock)
Porter, Barry


Howell, Rt Hon D. (G'ldford)
Portillo, Michael


Howell, Ralph (Norfolk, N)
Powell, William (Corby)


Hubbard-Miles, Peter
Powley, John






Price, Sir David
Sumberg, David


Proctor, K. Harvey
Tapsell, Sir Peter


Raffan, Keith
Taylor, John (Solihull)


Raison, Rt Hon Timothy
Tebbit, Rt Hon Norman


Rathbone, Tim
Temple-Morris, Peter


Rhodes James, Robert
Terlezki, Stefan


Ridley, Rt Hon Nicholas
Thomas, Rt Hon Peter


Ridsdale, Sir Julian
Thompson, Donald (Calder V)


Rippon, Rt Hon Geoffrey
Thompson, Patrick (N'ich N)


Roberts, Wyn (Conwy)
Thornton, Malcolm


Robinson, Mark (N'port W)
Thurnham, Peter


Roe, Mrs Marion
Townend, John (Bridlington)


Rossi, Sir Hugh
Townsend, Cyril D. (B'heath)


Rost, Peter
Trippier, David


Rowe, Andrew
Twinn, Dr Ian


Ryder, Richard
van Straubenzee, Sir W.


Sackville, Hon Thomas
Vaughan, Sir Gerard


Sainsbury, Hon Timothy
Waddington, Rt Hon David


Sayeed, Jonathan
Waldegrave, Hon William


Shaw, Giles (Pudsey)
Walker, Bill (T'side N)


Shaw, Sir Michael (Scarb')
Waller, Gary


Shelton, William (Streatham)
Wardle, C. (Bexhill)


Shepherd, Richard (Aldridge)
Watson, John


Shersby, Michael
Watts, John


Silvester, Fred
Wells, Sir John (Maidstone)


Skeet, Sir Trevor
Wheeler, John


Smith, Sir Dudley (Warwick)
Whitfield, John


Smith, Tim (Beaconsfield)
Whitney, Raymond


Speed, Keith
Wiggin, Jerry


Spencer, Derek
Wilkinson, John


Spicer, Jim (Dorset W)
Wolfson, Mark


Spicer, Michael (S Worcs)
Wood, Timothy


Squire, Robin
Woodcock, Michael


Stevens, Lewis (Nuneaton)
Yeo, Tim


Stewart, Allan (Eastwood)
Young, Sir George (Acton)


Stewart, Andrew (Sherwood)



Stewart, Ian (Hertf'dshire N)
Tellers for the Noes:


Stokes, John
Mr. Michael Neubert and


Stradling Thomas, Sir John
Mr. Tony Durant.

Amendment proposed: No. 2B, in page 1, line 16, at end insert—
'(1A) Subsection 1 of this section shall come into effect after the making of an Order by the Secretary of State, and no such Order shall come into effect until after the laying before Parliament by the Secretary of State of a report setting out the dates, and any other details which he may consider relevant, of the legal advice received by him prior to the introduction of this Act with respect to the legal interpretation of "relevant" and "total" expenditure for Rate Support Grant purposes.'.—[Dr. Cunningham.]

Question put, That the amendment be made:—

The Committee divided: Ayes 180, Noes 230.

Division No. 59]
[9.18 pm


AYES


Abse, Leo
Brown, R. (N'c'tle-u-Tyne N)


Adams, Allen (Paisley N)
Bruce, Malcolm


Alton, David
Buchan, Norman


Anderson, Donald
Caborn, Richard


Archer, Rt Hon Peter
Callaghan, Jim (Heyw'd &amp; M)


Ashley, Rt Hon Jack
Campbell, Ian


Ashton, Joe
Canavan, Dennis


Atkinson, N. (Tottenham)
Carter-Jones, Lewis


Bagier, Gordon A. T.
Cartwright, John


Banks, Tony (Newham NW)
Clark, Dr David (S Shields)


Barron, Kevin
Clarke, Thomas


Beckett, Mrs Margaret
Clay, Robert


Bell, Stuart
Clelland, David Gordon


Benn, Rt Hon Tony
Clwyd, Mrs Ann


Bennett, A. (Dent'n &amp; Red'sh)
Cocks, Rt Hon M. (Bristol S)


Bermingham, Gerald
Cohen, Harry


Bidwell, Sydney
Coleman, Donald


Blair, Anthony
Conlan, Bernard


Boyes, Roland
Cook, Frank (Stockton North)


Bray, Dr Jeremy
Corbyn, Jeremy


Brown, Gordon (D'f'mline E)
Cox, Thomas (Tooting)


Brown, Hugh D. (Provan)
Crowther, Stan


Brown, N. (N'c'tle-u-Tyne E)
Cunliffe, Lawrence





Cunningham, Dr John
Marshall, David (Shettleston)


Dalyell, Tam
Martin, Michael


Davies, Ronald (Caerphilly)
Mason, Rt Hon Roy


Davis, Terry (B'ham, H'ge H'l)
Maxton, John


Deakins, Eric
Maynard, Miss Joan


Dewar, Donald
Meacher, Michael


Dixon, Donald
Meadowcroft, Michael


Dobson, Frank
Michie, William


Dormand, Jack
Mikardo, Ian


Douglas, Dick
Mitchell, Austin (G't Grimsby)


Dubs, Alfred
Nellist, David


Dunwoody, Hon Mrs G.
Oakes, Rt Hon Gordon


Eadie, Alex
O'Brien, William


Eastham, Ken
O'Neill, Martin


Evans, John (St. Helens N)
Orme, Rt Hon Stanley


Fatchett, Derek
Park, George


Field, Frank (Birkenhead)
Parry, Robert


Fields, T. (L'pool Broad Gn)
Patchett, Terry


Fisher, Mark
Pavitt, Laurie


Flannery, Martin
Pendry, Tom


Foot, Rt Hon Michael
Powell, Raymond (Ogmore)


Forrester, John
Prescott, John


Foster, Derek
Radice, Giles


Fraser, J. (Norwood)
Randall, Stuart


Freeson, Rt Hon Reginald
Raynsford, Nick


Freud, Clement
Redmond, Martin


Garrett, W. E.
Rees, Rt Hon M. (Leeds S)


George, Bruce
Richardson, Ms Jo


Gilbert, Rt Hon Dr John
Roberts, Allan (Bootle)


Golding, Mrs Llin
Robinson, G. (Coventry NW)


Gould, Bryan
Rogers, Allan


Gourlay, Harry
Rooker, J. W.


Hamilton, James (M'well N)
Ross, Ernest (Dundee W)


Hancock, Michael
Rowlands, Ted


Hardy, Peter
Sheerman, Barry


Harrison, Rt Hon Walter
Sheldon, Rt Hon R.


Hart, Rt Hon Dame Judith
Shields, Mrs Elizabeth


Hattersley, Rt Hon Roy
Shore, Rt Hon Peter


Heffer, Eric S.
Short, Ms Clare (Ladywood)


Hogg, N. (C'nauld &amp; Kilsyth)
Short, Mrs R.(W'hampt'n NE)


Holland, Stuart (Vauxhall)
Silkin, Rt Hon J.


Home Robertson, John
Skinner, Dennis


Howell, Rt Hon D. (S'heath)
Smith, Rt Hon J. (M'ds E)


Howells, Geraint
Snape, Peter


Hoyle, Douglas
Soley, Clive


Hughes, Robert (Aberdeen N)
Spearing, Nigel


Hughes, Roy (Newport East)
Steel, Rt Hon David


Hughes, Sean (Knowsley S)
Stewart, Rt Hon D. (W Isles)


John, Brynmor
Stott, Roger


Jones, Barry (Alyn &amp; Deeside)
Straw, Jack


Kaufman, Rt Hon Gerald
Thomas, Dr R. (Carmarthen)


Lambie, David
Thompson, J. (Wansbeck)


Lamond, James
Thorne, Stan (Preston)


Leadbitter, Ted
Torney, Tom


Leighton, Ronald
Wainwright, R.


Lewis, Terence (Worsley)
Wallace, James


Litherland, Robert
Wardell, Gareth (Gower)


Livsey, Richard
Weetch, Ken


Lloyd, Tony (Stretford)
Welsh, Michael


Lofthouse, Geoffrey
White, James


Loyden, Edward
Williams, Rt Hon A.


McCartney, Hugh
Wilson, Gordon


McDonald, Dr Oonagh
Winnick, David


McKay, Allen (Penistone)
Woodall, Alec


McNamara, Kevin
Young, David (Bolton SE)


McTaggart, Robert



McWilliam, John
Tellers for the Ayes:


Madden, Max
Mr. Frank Haynes and


Marek, Dr John
Mr. Chris Smith.


NOES


Alexander, Richard
Browne, John


Ancram, Michael
Bruinvels, Peter


Baker, Rt Hon K. (Mole Vall'y)
Buchanan-Smith, Rt Hon A.


Best, Keith
Butler, Rt Hon Sir Adam


Biffen, Rt Hon John
Chope, Christopher


Body, Sir Richard
Cockeram, Eric


Bottomley, Peter
Coombs, Simon


Boyson, Dr Rhodes
Cope, John


Brown, M. (Brigg &amp; Cl'thpes)
Currie, Mrs Edwina






Dorrell, Stephen
Lawrence, Ivan


Douglas-Hamilton, Lord J.
Lee, John (Pendle)


Durant, Tony
Leigh, Edward (Gainsbor'gh)


Fallon, Michael
Lester, Jim


Farr, Sir John
Lewis, Sir Kenneth (Stamf'd)


Fenner, Dame Peggy
Lilley, Peter


Finsberg, Sir Geoffrey
Lloyd, Sir Ian (Havant)


Fletcher, Sir Alexander
Lloyd, Peter (Fareham)


Fookes, Miss Janet
Lord, Michael


Forman, Nigel
Lyell, Nicholas


Forsyth, Michael (Stirling)
McCrindle, Robert


Forth, Eric
Macfarlane, Neil


Fox, Sir Marcus
MacGregor, Rt Hon John


Franks, Cecil
Maclean, David John


Fraser, Peter (Angus East)
McLoughlin, Patrick


Freeman, Roger
McNair-Wilson, M. (N'bury)


Gale, Roger
McNair-Wilson, P. (New F'st)


Galley, Roy
McQuarrie, Albert


Gardiner, George (Reigate)
Madel, David


Glyn, Dr Alan
Major, John


Goodlad, Alastair
Malins, Humfrey


Gow, Ian
Malone, Gerald


Gower, Sir Raymond
Maples, John


Grant, Sir Anthony
Marland, Paul


Greenway, Harry
Marlow, Antony


Griffiths, Sir Eldon
Marshall, Michael (Arundel)


Griffiths, Peter (Portsm'th N)
Mates, Michael


Grist, Ian
Mather, Sir Carol


Ground, Patrick
Maude, Hon Francis


Grylls, Michael
Maxwell-Hyslop, Robin


Hamilton, Hon A. (Epsom)
Merchant, Piers


Hamilton, Neil (Tatton)
Meyer, Sir Anthony


Hampson, Dr Keith
Mills, Iain (Meriden)


Hanley, Jeremy
Mills, Sir Peter (West Devon)


Hannam, John
Moate, Roger


Hargreaves, Kenneth
Monro, Sir Hector


Harris, David
Montgomery, Sir Fergus


Haselhurst, Alan
Morris, M. (N'hampton S)


Havers, Rt Hon Sir Michael
Morrison, Hon P. (Chester)


Hawkins, C. (High Peak)
Moynihan, Hon C.


Hawkins, Sir Paul (N'folk SW)
Mudd, David


Hawksley, Warren
Neale, Gerrard


Hayes, J.
Nelson, Anthony


Hayhoe, Rt Hon Sir Barney
Neubert, Michael


Hayward, Robert
Nicholls, Patrick


Heathcoat-Amory, David
Onslow, Cranley


Henderson, Barry
Oppenheim, Rt Hon Mrs S.


Hickmet, Richard
Ottaway, Richard


Hicks, Robert
Page, Sir John (Harrow W)


Higgins, Rt Hon Terence L.
Page, Richard (Herts SW)


Hill, James
Parkinson, Rt Hon Cecil


Hind, Kenneth
Pawsey, James


Hogg, Hon Douglas (Gr'th'm)
Pollock, Alexander


Holland, Sir Philip (Gedling)
Porter, Barry


Holt, Richard
Portillo, Michael


Howarth, Alan (Stratf'd-on-A)
Powell, William (Corby)


Howarth, Gerald (Cannock)
Powley, John


Howell, Rt Hon D. (G'ldford)
Price, Sir David


Howell, Ralph (Norfolk, N)
Proctor, K. Harvey


Hubbard-Miles, Peter
Raffan, Keith


Hunt, David (Wirral W)
Raison, Rt Hon Timothy


Hunt, John (Ravensbourne)
Rathbone, Tim


Hunter, Andrew
Rhodes James, Robert


Irving, Charles
Ridley, Rt Hon Nicholas


Jackson, Robert
Ridsdale, Sir Julian


Jessel, Toby
Rippon, Rt Hon Geoffrey


Jones, Gwilym (Cardiff N)
Roberts, Wyn (Conwy)


Jones, Robert (Herts W)
Robinson, Mark (N'port W)


Joseph, Rt Hon Sir Keith
Roe, Mrs Marion


Kershaw, Sir Anthony
Rossi, Sir Hugh


Key, Robert
Rost, Peter


King, Roger (B'ham N'field)
Rowe, Andrew


Knight, Greg (Derby N)
Ryder, Richard


Knight, Dame Jill (Edgbaston)
Sackville, Hon Thomas


Knowles, Michael
Sainsbury, Hon Timothy


Knox, David
Sayeed, Jonathan


Lamont, Rt Hon Norman
Shaw, Giles (Pudsey)


Lang, Ian
Shaw, Sir Michael (Scarb')


Latham, Michael
Shelton, William (Streatham)


Lawler, Geoffrey
Shepherd, Richard (Aldridge)





Shersby, Michael
Townend, John (Bridlington)


Silvester, Fred
Townsend, Cyril D. (B'heath)


Skeet, Sir Trevor
Trippier, David


Smith, Sir Dudley (Warwick)
Twinn, Dr Ian


Smith, Tim (Beaconsfield)
van Straubenzee, Sir W.


Speed, Keith
Vaughan, Sir Gerard


Spencer, Derek
Waddington, Rt Hon David


Spicer, Jim (Dorset W)
Waldegrave, Hon William


Spicer, Michael (S Worcs)
Walker, Bill (T'side N)


Squire, Robin
Waller, Gary


Stanley, Rt Hon John
Wardle, C. (Bexhill)


Stevens, Lewis (Nuneaton)
Watson, John


Stewart, Allan (Eastwood)
Watts, John


Stewart, Andrew (Sherwood)
Wells, Sir John (Maidstone)


Stewart, Ian (Hertf'dshire N)
Wheeler, John


Stokes, John
Whitfield, John


Stradling Thomas, Sir John
Whitney, Raymond


Sumberg, David
Wiggin, Jerry


Tapsell, Sir Peter
Wilkinson, John


Taylor, John (Solihull)
Wolfson, Mark


Tebbit, Rt Hon Norman
Wood, Timothy


Temple-Morris, Peter
Woodcock, Michael


Terlezki, Stefan
Yeo, Tim


Thomas, Rt Hon Peter
Young, Sir George (Acton)


Thompson, Donald (Calder V)



Thompson, Patrick (N'ich N)
Tellers for the Noes:


Thornton, Malcolm
Mr. Mark Lennox-Boyd and


Thurnham, Peter
Mr. David Lightbown.

Question accordingly negatived.

Mr. John Fraser: I beg to move amendment No. 5, in page 2, line 3, leave out subsections (3), (4) and (5).
This is not a mere probing amendment. If we are not satisfied with the Government's explanation for the presence of the subsections, we reserve the right to call a Division on it.
These are complex matters. Clause 1 is largely to do with the accountancy aspect of block grant and rate support grant. It may be helpful if I say something about what I understand to be the background to this matter. Since 1980, especially since the passage of the Rates Act 1984, the Government have had the notion that the more a council spends above a defined limit on the care, protection and welfare of its citizens, the more it should be penalised in the withdrawal of central Government assistance.
This has happened in my borough. I am sorry that I cannot give other examples, but there was not time to gather the facts on them. The time available has been extremely limited. On the principle of the more one needs, the less one gets, between 1979 and 1985, Lambeth lost grant totalling £113 million. In my borough—this is repeated in other places, such as Liverpool—in some years the penalty suffered has exceeded the inner city partnership allocation received by it. Despite the fact that the borough has been racked by unemployment, riot, homelessness and poverty, we are penalised for facing our responsibilities. The same is true of many other hard-pressed inner-city boroughs.
The measure of a council's profligacy in dealing with the problems which it faces—according to the Government, at any rate—is the rate revenue account. The Secretary of State is saying that some councils have invented an artificial income to disguise the true level of their expenditure. The clause will give the Secretary of State the power to regulate the contents of the income and the expenditure sides of the rate revenue account.
This is an odd development. If a person on supplementary benefit came into our advice bureaux and exaggerated his income and minimised his expenditure as a supplementary benefit claimant, we would think that he was taking leave of his senses. But such is the Alice-in-Wonderland world of local government finance that ostensible parsimony is rewarded. We are told that local authorities have been disguising their budgets by adding income to show that they are spending less money than they are. The Secretary of State should reward not notional parsimony but real parsimony by taking out what he regards as artificial items of income.
Subsections (3), (4) and (5), which we propose to leave out of the Bill, have not yet been amended by Government amendments. The Government amendments talk about "defined revenue expenditure" and "defined revenue income". It would be helpful during the debate on this amendment or on the next group of amendments if the Government told us what they mean by those terms.
Clause 2 gives the Secretary of State the power to specify what is and is not income and expenditure. In other words, he can alter the rules. Indeed, clause 2(4) states that he can define income and expenditure for "any" year. I presume that clause 2(4) means that he can act retrospectively or prospectively in specifying income and expenditure.
The wording of the Government amendments is curious. They do not use the phrase "specified expenditure" or "specified income", but "defined revenue income" or "defined revenue expenditure". It would be helpful to know why the word "defined" has been chosen. Do we need to consider some other statute or another part of the Bill to discover why the words "defined revenue expenditure" have been used?

Mr. Alfred Morris: The Secretary of State does not know, but clearly they mean what he says they mean.

Mr. Fraser: My hon. Friend says that they mean what the Secretary of State says they mean. Clause 2(4) makes it clear that income and expenditure are exactly what the Secretary of State chooses to specify. In choosing to specify their meaning in that way, the Secretary of State is not subject to any sort of parliamentary challenge, and is not obliged to submit any kind of order or regulation to the House, and the matter is therefore removed entirely from the control of this House.
I should like to ask the Government several questions about the accountancy provisions because, although they refer to "defined revenue expenditure" and "defined revenue income", they leave the Minister to decide exactly what is income and what is expenditure. The Government already have the power to prescribe forms for accounting and block grant purposes in the Local Government, Planning and Land Act 1980.
Will the Minister tell the House why the Secretary of State is creating new powers to define or specify what is income and expenditure when, for other accounting purposes, those powers already exist in the Local Government, Planning and Land Act?
Secondly, if the Minister is saying that those provisions apply only to the calculation of block grants, can he demonstrate that safeguards exist in the Bill to limit the

power of specifying—contained in clause 2(4)—for block grant purposes only, rather than for widely interfering or defining local government accounting?
Thirdly, what assurances can the Minister give concerning the Government's intention to use their powers? Will they be used solely for prescription for block grant purposes, and if they are to be used only for prescribing accountancy provisions for block grant purposes, will the Government accept an amendment providing that the powers are to be limited only to those purposes?
Fourthly, what assurance can the Minister give that the accounting provisions will not be used to pursue a policy of penalising the poor, because clause 2(4) makes it clear that they can be used retrospectively in that way? Clause 1 applies to accountancy provisions for any year, but the definition of expenditure and income given in clause 2(4) can apply to any year.
The provisions of clause 1 are obnoxious because they vest enormous discretion in the Minister without requiring parliamentary approval. That would not be tolerated in any other area of law. It certainly would not be tolerated in company law. If one wants to know what one has to put in one's income and expenditure accounts for the purposes of company law, one can turn to schedule 4 of the Companies Act 1985, where page after page states what should be contained in a balance sheet and what should be put in the income and expenditure or profit and loss accounts. Those matters are clearly defined and are not open, as far as I can see, to amendment by Ministers. They are well-established practices for commercial purposes and that is quite right because, if a Minister had the power to alter the definition of income and expenditure in Companies Acts, that could have a catastrophic effect on the company's tax position, on the profits on which it must pay tax, and on the view taken of the company by shareholders or creditors.
In exactly the same way, the alteration of the definition of income and expenditure under the Bill could well have a catastrophic effect on local authority finances, if the result of those definitions robbed local authorities of the block grant and support that they deserve for their citizens. That would not be tolerated under company law, and it would certainly not be tolerated under tax law because such provisions could be used for punitive purposes.
Let us imagine what would happen if the Treasury took the power to specify proper practices, accounting definitions or definitions of payment in deeds of covenant. Under a deed of convenant, one person promises to pay another person a certain amount of money and, if the recipient does not have any other form of taxable income, the Government subsidises him or her to the tune of 29p in every pound. That is a common arrangement between grandparents and children and especially between parents and adult children in order to provide for them during further education.
Let us imagine that the Treasury had the sort of power that the Department of the Environment is seeking in the Bill. It might say, "Although the deed of covenant has been concluded, the Government have decided that the cost of meeting the deed of covenant is so high that we are proposing that the Government will reimburse only those deeds of covenant that are made for the benefit of children attending public schools rather than for children attending


state schools." If anybody were to suggest such a thing, we would all recoil in horror and we would not be willing to accept it.

Mr. Dobson: Not this week.

Mr. Fraser: That is no different in principle from what the Government are proposing in the Bill.
The proposals, which, on the face of it, are mainly to do with accountancy, leave far too much discretion to Ministers and allow them to decide the way in which local authorities' accounts turn out and the sort of support they get from the Government. I understand that the Secretary of State was once a Treasury Minister. I suppose that being able to deem things as expenditure, income or otherwise may be a habit that he picked up from the Treasury by dealing with, for example, inheritance tax or capital transfer tax.
There is a story about a senior Treasury draftsman who bought his child a train set for Christmas. When the train set was set up, he found that he had failed to buy a transformer. His child was disappointed at not seeing the trains running. He said, "Don't worry, we do it all the time in the Treasury. These trains are deemed to pass in this direction and the others are deemed to pass in that direction. You should have an enjoyable time."
We object to the Secretary of State's proposition that he should be able to deem various items of expenditure. We do that for serious reasons. It is to do not with dry accountancy but with the needs and requirements of the poor, dispossessed, unemployed and homeless of the boroughs that many of us represent. That is the reason why we oppose the Bill and have tabled our amendments.

Mr. Clive Soley: I should like to follow up the comments made by my hon. Friend the Member for Norwood (Mr. Fraser). The provisions will affect my council, as I suspect they will affect councils up and down the country. What does the Minister intend to do with the discretion he is given in this clause about the local authorities which, as a result of the recent chaotic weather conditions, will have greatly increased expenditure? Will the Minister compensate the local authorities for the vast amounts of money they have had to pay out as a result of the flooding of houses, burst pipes and emergency services provided day and night?
The Minister tells us in other circumstances that the Government are providing a service that local people want. The truth is that they are not. They have put on to local authorities an increasingly chaotic and manic way of calculating rate support grant. The clause perpetuates that method and, as I understand it, and as my hon. Friend the Member for Norwood has suggested, it gives a degree of discretion to the Minister who must now decide whether he will allow certain extra revenue expenditure.
Let us look at what has happened to some local authorities. I went round my own area yesterday. In one case, 300 houses are available which, largely because of cuts in the housing revenue, have not had satisfactory lagging and have therefore suffered burst pipes with water coming through. There are blocks of flats facing similar problems. The chairman of the housing committee, Councillor Jeff Kenner, has opened certain emergency accommodation. A school was opened and various other emergency measures have been taken. Standpipes were erected when pipes burst and people were taken into emergency accommodation.
At the same time, largely because of the crisis facing homeless people generally, the local authority opened up certain areas to accommodate single homeless people in the London borough of Hammersmith and Fulham. I know that such action has been taken by other local authorities. That will not be cost-free. The Government want such action to be taken and they gave an undertaking in the House to examine the possibility of opening up the tube stations in London to homeless people. If the Government take the position that seriously, presumably they expect local authorities to take precisely the kind of action taken by my local authority and others.
9.45 pm
Will the Minister give me a commitment that expenditure of this type, whether incurred by the borough of Hammersmith and Fulham or by any other local authority, will not be taken into account in any other cuts that the Government may impose on authorities? In other words, will he give a commitment that the Government will make an exception of the special payments being invoked by local authorities at present to pay for the emergency services?
Will the Minister come forward with real money to enable local authorities to absorb the shock that has been imposed upon them by the severe weather and the homeless crisis facing London?

The Minister for Local Government (Dr. Rhodes Boyson): The comments by the hon. Member for Hammersmith (Mr. Soley) have nothing to do with the clause under consideration. If the hon. Gentleman wants to write to me, he can do so. However, if I were to answer his points, other hon. Members would raise similar questions about their local swimming pools, roofs and the rest. This is not on.

Mr. Soley: rose——

Dr. Boyson: The hon. Gentleman's comments had nothing to do with the amendment. He has had a good try, he will have earned a mention in the local press and he has done his job. Obviously, he has earned five more votes for the next general election.

Mr. Soley: The Minister has made a stupid outburst. I have heard the Minister say some stupid things before, but the outburst that he has just made takes some beating.
Local authorities from one end of the country to another are suffering from the problems I have described. I have seen the problems that I have described in my area. However, my area is not unique, unless the Minister believes that the sun does not shine in Hammersmith and Fulham but it does in the rest of the country.

Dr. Boyson: If the hon. Gentleman wishes to write to me on that point, which has nothing to do with my reply to the clause, he can do so. I am aware of the problems with regard to the weather that exists the length and breadth of the country, in the hon. Gentleman's constituency and in practically every other constituency.
Amendment No. 5 removes three parts of the clause. As the hon. Member for Norwood (Mr. Fraser) said, the provision relates back to the Local Government, Planning and Land Act 1980. The definitions were brought in in the 1981–82 settlement. The definitions of total and relevant expenditure that were accepted were those suggested by the local authority associations as against the recommendations of the Department. The Ministers accepted


the recommendations of the local authority associations and they were included. They stood the test of time until the situation arose in which there were certain court cases and different definitions that put at risk not all of the 1980 Act but simply the definitions of relevant and total expenditure.
The hon. Gentleman asked what was defined income. In essence, defined income is all revenue income except items credited to such other accounts as the housing revenue account and defined expenditure is all revenue expenditure except items debited to accounts such as the housing revenue account dealing with housing expenditure. Similarly, we could define total and relevant expenditure——

Mr. John Fraser: If there is a dispute about what is defined expenditure and income, who decides that dispute, the courts or the Minister?

Mr. Dobson: It is not in his brief.

Dr. Boyson: If it is not in my brief, I shall reply just the same. I have explained what the Government hold to be the definition of defined expenditure, but if people do not agree with it, it will be challenged. Such words have to be built into the Bill carefully as people have gone over previous legislation with magnifying glasses, and they will do so again.
Clause 1 does not enable the Secretary of State to control what local authorities spend. There is simply a requirement to keep an account. We have defined how the accounts should be kept working within the definitions that I have mentioned.
The hon. Member for Norwood said that this is a probing amendment. If it were accepted, it would be a wrecking amendment and the definitions would be destroyed. We are trying to make the definitions as watertight as possible. The amendment would delete that part of clause 1 which shows the nature of the rate fund revenue account. If amended, clause 1 would no longer serve its purpose of setting up the rate fund revenue account, which is the foundation of the definitions of relevant and total expenditure. The amendment would destroy the very basis of what we are doing, which is to incorporate in statute a method of calculating relevant and total capital expenditure which would allow us to maintain the status quo.
The hon. Member mentioned Lambeth. It spends 33 per cent. above grant-related expenditure. Its rate is 46 per cent. more than its class average. Rent arrears are 39 per cent. of what could be collected in one year, and the Lambeth laundry costs ratepayers £8 a wash as compared with the payment received of £1·50. The hon. Gentleman said that the Bill was Alice in Wonderland. I suggest that such economics is Alice in Wonderland.

Mr. Fraser: Now will the Minister reply to the debate?
I asked him who settles the issue if there is a difference of opinion about what is to be defined expenditure for the purpose of income expenditure. We have the word "defined" without any definition.
The Minister asked me why expenditure in Lambeth is rather higher than in some adjoining and more affluent boroughs. The answer has been provided by an independent urban research centre called CES Ltd. It has

described what has happened to the inhabitants of Lambeth during the past few years. I can tell the Minister what has gone wrong—we have had a Tory Government.
The average standard of living of 96,000 households in Lambeth, as measured by their gross income before tax, decreased by 5 per cent., allowing for inflation, between 1979 and 1984. During the same period, average income in the country as a whole rose by 4 per cent. There is a 9 per cent. difference between average incomes in Lambeth and the rest of the country.
Unemployment in Lambeth increased from about 5 per cent. in 1979 to 20 per cent. in 1985. There is 25 per cent. male unemployment in the borough. That also has happened since 1979. Lower income households have experienced a decline of 10 per cent. in their income before tax since 1979 and some other groups have experienced a 7 per cent. increase in income. In the category of households of working age that support families, 45 per cent. are represented in the poorest 25 per cent. of the national average. They have experienced a great drop in their incomes. The Minister asked why Lambeth is different. It is because it has been continually impoverished and penalised since we have had a Tory Government. Perhaps the Minister will reply to the real point that I raised in the debate.

Dr. Boyson: The answer is perfectly straightforward—ultimately it rests with the courts. We have defined what we believe to be the answer in the Bill. The Bill, once it becomes an Act, is dependent for its ultimate analysis on court definitions.

Mr. Fraser: Does that mean that the Government will not use clause 2(4) to specify what is income and expenditure? Will it be left to the courts, and will the Minister drop clause 2(4)?

Dr. Boyson: It is certainly obvious to the dispassionate observer that any Government who are putting a Bill together do so on the basis of the intentions that they wish to achieve. The Bill has come together as a whole and includes the two clauses referred to by the hon. Gentleman. They are part and parcel of the Bill and obviously intended in the way the Bill was drafted by the Government and we hope that the Bill becomes an Act.

Mr. Hancock: We have to ask ourselves whether, before too long, we shall have one local authority after another queueing up to take the Government to court to test the definitions in the Bill. No one would suggest that that was right, and that cannot be the Minister's ambition in his wish to see the Bill pushed through.
I take the Minister back two years when Portsmouth city council was rate-capped. It was the only Conservative local authority to be rate-capped in that year and it was absolutely bewildered. I remember the heartache and crocodile tears of Portsmouth's Conservative politicians. It could not possibly be that the council had spent too much on creating jobs because it had not. It could not be that it had spent too much on creating better housing because it had not. It could not be that it had provided better services for the elderly because it had not. What the council had done, and it was repeated time and time again, was that it had followed, virtually to the letter, the Government's instructions about the way in which local government financing should be accounted for.
It was a bewildering situation wherein the local authority was caught in a net cast out by the Government.


Despite repeated attempts by hon. Members representing Portsmouth, the leader of the council, and the Conservative Association of Portsmouth to find out why the council had been rate-capped, a satisfactory explanation has never been received.
The suggestion is that Portsmouth was only caught in that net because the Government had missed Sheffield the first time round. The only way in which they would get Sheffield in the rate-cap net was to extend that net slightly further and in doing so they embraced Portsmouth. Thus the Government killed two birds with one stone and claimed that rate capping was an impartial, unbiased selection of local authorities—Labour-controlled Sheffield and Conservative-controlled Portsmouth. It was to be seen as the Government's bipartisan approach to local government finance.
Why do we need further controls? The clauses use the words "proper practices". I would be interested if the Minister could explain what proper practice means. What is intended by those words? How will that phrase be defined in Government terms?
Under existing law auditors are already required to make sure that local councils conduct their accounting in a proper way. Is the Minister saying that that law is inefficient? If so, surely the Government should get their own house in order. Very few hon. Members would disagree that Government accounting leaves a lot to be desired. Creative accountability is not solely in the domain of local government.
Surely over the past two years we have recognised that the Government are extremely clever in their creative accounting when it comes to trying to hide or shift responsibility. They have tried privatisation and contracting out various types of work, and shifting capital to revenue is a classic example. If they were subjected to the same scrutiny as that which is suggested for local government, the Committee would be surprised at some of the results. I hope that at some other time the Minister will try to use what influence he has to suggest that a similar exercise could be carried out.
What is wrong with the current system and the accountability and the way in which local government finance is put together and checked? If the Minister thinks that auditors are not doing a proper job now, how will he define——

It being Ten o'clock, The CHAIRMAN left the Chair to report progress and ask leave to sit again.

Committee report Progress.

BUSINESS OF THE HOUSE

Ordered,
That, at this day's sitting, the Local Government Finance Bill may be proceeded with, though opposed, until any hour.—[Mr. Ryder.]

Local Government Finance Bill

Again considered in Committee.

Question again proposed, That the amendment be made.

Sir Kenneth Lewis: On a point of order. I have been watching the progress of the Bill with some interest. The Order Paper carries about 130 amendments. In a normal parliamentary day we deal with 10 such amendments. I have worked out that if we go on at this rate it will take us about 20 normal parliamentary days to deal with this Bill. Will you, Miss Boothroyd, ask

the Leader of the House, either tonight or tomorrow, to bring in a timetable motion on this Bill and announce it tomorrow so that we may start it on Wednesday when we are supposed to discuss this Bill again?
I want to avoid on Wednesday a repetition of tonight's obvious filibuster so that the Committee can make progress. I remind the Committee and you, Miss Boothroyd, that a Select Committee has already said there should be timetabling of all Bills. I may not go as far as that, but the time has come to limit the kind of nonsense we are seeing today on a Bill that is basically non-controversial.

Mr. Allan Roberts: Further to that point of order. It was made clear at the beginning of the debate by my hon. Friend the Member for Copeland (Dr. Cunningham) that the Opposition have no intention of filibustering or of attempting to talk out tomorrow's business. Tomorrow is an Opposition Supply day.
The hon. Member for Stamford and Spalding (Sir. K. Lewis) has hardly been in his place during the debate. If he had been, he would know that the issues have been debated quite succinctly without any closure motion having to be moved, and that the progress we are making is the kind of progress that one would normally make in Committee. The hon. Gentleman has merely drawn attention to the fact that the Government who accuse the Opposition of not scrutinishing legislation and who do not notice illegalities in their legislation have not provided enough time to debate this serious and complicated Bill.

The Temporary Chairman (Miss Betty Boothroyd): I shall respond to the point of order raised by the hon. Member for Stamford and Spalding (Sir. K. Lewis). He will understand that I am not as expert as he is in mathematics. Therefore, I have not calculated how long it may take to get through these amendments. My job is to deal not with the timetabling of the Bill but with the proceedings. I am sure that the hon. Gentleman's points have been noted in the correct place.

Mr. Hancock: I am sure that the Minister is grateful for the point of order raised by his colleague the hon. Member for Stamford and Spalding (Sir. K. Lewis). Contributions from the Government Benches in support of the Minister's stance have been sadly lacking. A contribution, even in the form of a point of order by a Conservative Member, is to be welcomed by the Minister. The hon. Gentleman can now leave the Chamber with some grace, knowing that the Conservative party has done its bit by the Minister this evening in raising the point of order.
If the Minister does not think that the auditors are doing a proper job now, how will he define proper practice with regard to the future auditing of local government expenditure? The introduction to the report of the Chartered Institute of Public Finance and Accountancy refers to the background papers of the Local Government Finance Act 1982. It states:
The Secretary of State is empowered to make regulations which 'make provision with respect to the keeping, form, preparation and certification of accounts and statements of accounts, and the publication of information relating to accounts and to the publication of statements of account'.
What more could possibly be needed that is not covered already? What wider definition of the role of local government and its responsibility and accountability with regard to relating its finances to the wider populace, its electorate, the Government or whatever is needed than


those words that are already in an Act and to which local government must respond? Does the Minister suggest that those powers are not draconian enough for his benefit, or is there something else about which we still do not know that the Government want to do?
That matter draws me back to what was said by an hon. Member earlier about the role of the local authority member. Is this a back-door way of finally eroding what is left of public accountability in the role of the local councillor? In the end, will this role be slashed away by various pieces of legislation—this being yet another example of it—in that we shall have appointed commissioners rather than councillors to run local authorities? If we adopt what is contained in the Bill, particularly in these clauses, we shall go down a dangerous path. We now ask the impossible of local authorities. I do not know what the Minister is trying to achieve, but, from my past and present experience in local government, I know the difficult task that we now have in trying to put across to our electorates the reasons for matters such as rate capping.
It was impossible for the city council in Portsmouth to get an answer about why it was rate capped and what it did wrong. If it was impossible for that council to get an answer, how on earth will it be possible in future for local councillors to know what the Government are thinking in terms of the financial constraints that the Bill will place on them? How on earth do we expect the people who foot the bill, either as taxpayers or ratepayers, to understand what is happening in local government and in finance?
This is a difficult matter. It is being clouded even more by a complete waste of time and energy directed towards achieving little. At the end of the day, we do not know—the Minister has not told us and the Secretary of State did not tell us when he introduced the Second Reading debate—what the Government hope to achieve. We were told that the thrust of the Bill is to rectify past mistakes. The Bill now appears to be more concerned with turning the screw for the future as opposed to redressing what happened in the past. That is something about which we should all be wary.
I am sorry that the hon. Member for Stamford and Spalding intervened to defend the Government on the Bill and to criticise the length of time that it might take. It is important that, at the end of the day, we all remember that local government is important. It means a lot to people. Local councillors have an even more almighty task because of the distressing matters that have occurred over the past seven years. Their job is being made increasingly more difficult by the sort of interference that this and other Bills have forced upon them. I hope that the House will reject the Government's local government finance policies. The way to do that would be wholeheartedly to support the amendments.

Dr. John Marek: I support these excellent amendments. The Bill would be much better if they were passed. A consistent thread has run through this Government's policies for the last six or seven years. It is to make the poor poorer and the rich richer. Unemployment has increased from 1 million to 4 million; houses have not been built, resulting in the worst housing programme since the 1920s; there have been social security

cuts; the National Health Service is unable to provide the services that everyone who works in it would like it to provide.
Local authorities are not completely run by Conservative party members. Therein the Government saw opposition. Therefore, they have introduced various local government Acts. I do not know how many local government Bills they have introduced, but there has been at least one every year and in some years there have been two. They have been introduced because the Government do not like what some local authorities do. With their large majority, therefore, the Government have introduced Bills to try to stop what they do.
This Bill is the latest example of what the Government are trying to do. They are trying to bring local authorities to heel in such a way that their accounts will be transparent to the Government, who will then be able to say how the accounts should be organised and which sums ought to be put into the various local authority accounts.
The Government are not introducing this Bill because they have at heart the general welfare of the people. They have introduced the Bill because they want to cut the income tax of those who are already employed. They have already cut income tax from 83p to 60p in the pound. Recently there has been talk of the Government cutting income tax even further. They have also cut unearned income tax. The philosophy is that more should be given to those who are already rich and well-heeled but that those who are not rich and well-heeled should suffer.
This Government and their supporters are well-heeled. They do not understand what many electors, including those who live in Lambeth, have to undergo. The Minister referred to Lambeth about 20 minutes ago and said that Lambeth's expenditure is 33 per cent. above the grant-related expenditure assessment. My hon. Friend the Member for Norwood (Mr. Fraser) dealt with that point. He told the Minister that the electors of Lambeth have particular problems that the local authority is trying to overcome.
If the Bill is not amended, it will increase the problems that electors have to face. Administration will be increased; yet again local authorities will have to put their accounts in a different form. Clause 1(1) deals with rate fund revenue accounts. They will have to be kept in a particular way. The Minister will be able to say what should be and what should not be included in them. Clause 2(4) says:
The Secretary of State may specify in respect of any year kinds of expenditure or income which are to be regarded as of a revenue nature for the purpose of debiting or crediting items of account to a rate fund revenue account.
The Government are taking almost complete powers over the presentation of these types of accounts. The only accounts that will not be included in the general rate fund revenue accounts are those that are listed in schedule 1. If the Bill is passed, local authorities will be unable to do other than bow to Ministers' wishes. The Minister likes to blame councils for many of the country's ills, when that is not true. Nobody is perfect, and I would not support every action by every local authority in the land. I disagree with many actions of parsimonious and mean-minded Tory local councils. However, if they are elected as Tory councils I respect their right to do as their electors wish. It is up to the electors to change the complexion of that council when the time comes to vote.

Mr. Meadowcroft: Will the hon. Member explain why it is that his hon. Friend the Member for Oldham, West (Mr. Meacher) talks about a future Labour Government insisting on local authorities spending according to priorities determined nationally by a Labour Government? What is the difference?

Dr. Marek: I did not hear what my hon. Friend the Member for Oldham, West (Mr. Meacher) said, but no doubt he was talking about minimum standards. Old-age pensioners——

The Temporary Chairman (Mr. Patrick Cormack): The hon. Gentleman is straying off the point.

Dr. Marek: I was slightly led astray by a mischievous intervention.
There is a difference between minimum standards designed to ensure that people do receive services and what I have been talking about.
The Government make many mistakes. I wonder how many millions of pounds they wasted on Nimrod. Hon. Members might think about Nimrod and AWACS and the many hundreds of millions of pounds that have been spent on that.
What annoys me most is the way in which the Minister introduced this amendment. He said that this Bill is a result—this is the impression that he wanted to make—of the Government being weak in accepting the local authorities' suggested changes some years ago. The Minister said that it was not the Government who defined relevant expenditure and that the definition was suggested by local authorities. Whatever the Government do, it is never their fault. Where does the buck stop? Does it stop at the local authorities? The Government cannot blame it on the local authorities. The Government could blame it on their advisers sitting in the Box over there. Why do the Government not do that? I understand that there are protocols to stop the Government from doing that, but the Government could have done that, because they are the executive in the country and are responsible for legislation. It is because the Government are responsible for legislation that we have the Bill before us. The Government made a mess of it. Time and time again the Government will not admit that they have made a mistake, it does not matter what is under discussion. I can give examples from different spheres—the cause of the Falklands conflict—but I will not dwell on that because I would be ruled out of order by you, Mr. Cormack. The Government do not say that they are to blame for any of these matters.
We have a nasty lie being told by the Government to the effect that this was nothing to do with them, it was the local authorities saying that relevant expenditure had to be defined in this way, and because of that the Government have had all this trouble. It has been going on for three, four, five years and the Government have not found that the original definition was legally imperfect. This is an important point.
We are debating an amendment that seeks to improve the Bill in an important way by deleting clauses 3, 4 and 5. But lo and behold, the next group of amendments are Government amendments Nos. 6, 8 and 12. The Government are already seeking to amend a Bill which was published only a few weeks ago. Is that likely to

inspire confidence among the public? The Government can calmly go on for three or four years before saying that what has happened has been illegal but that it is not their fault but that of those nasty local authorities.
The definition of proper practices has been mentioned. It does not look as though proper practices will appear in the Bill. That is the subject of the next group of amendments. I certainly have no confidence in the Government, given the way in which they are thrusting forth to the left and the right, trying to find some way of keeping local authorities to heel so that they can contain their expenditure so that the Government can continue to give money to the rich, which is what they have been doing for the past seven years. [Interruption.] If the hon. Member for Norwich, South (Mr. Powley) does not agree, he should intervene and I shall be glad to give way.
The amendment will improve the Bill. I hope that we shall be able to discuss Government amendment No. 76 and those grouped with it. I would, in common with my hon. Friends, like to understand what proper practices are. If those words are not now to appear in the Bill, will there be another amendment and shall we have a different definition? I would be interested to hear why the Government now think that their new definition will be watertight and transparent, and why it will not continually be challenged in the courts. I suspect that that will not happen and that the Government have got things all wrong and that is why I support the amendment.

Amendment negatived.

Dr. Boyson: I beg to move amendment No. 6, in page 2, line 3, leave out from 'The' to 'and' in line 6 and insert:
'items of account debited to the rate fund revenue account of an authority shall include all items of defined revenue expenditure, and the items of account credited to the rate fund revenue account of an authority shall include all items of defined revenue income;'.

The Temporary Chairman: With this it will be convenient to discuss the following: Government amendments Nos. 8 and 12.
Amendment No. 29, in page 2, line 36, at end add—
'() The following items of account shall be debited or credited to a rate fund revenue account, namely, items which are not items of expenditure or income but which in accordance with the proper practices to be observed in compiling accounts are to be debited or credited to the rate fund revenue account.'.
Amendment No. 188, in clause 13, page 9, line 40, at end add—
'(f) "expenditure" includes all expenditure which is payable by a local authority to another person, but does not include any financial transfer between funds kept by a local authority.
(g)"income" includes all income which is payable to a local authority by another person, but does not include any financial transfer between funds kept by a local authority.'.

Dr. Boyson: These amendments are designed to make it clear that, in addition to revenue expenditure and income, other items of account can be included in the rate fund revenue account when this conforms to proper practice.
The starting point is that the rate fund revenue account is identified as the account to which all revenue expenditure and income must be debited or credited, except revenue expenditure or income which is properly debited or credited to certain other accounts. The revenue expenditure and income to be excluded is not simply that which is properly debited or credited to any other account


than the rate fund revenue account, since expenditure and income included in memorandum accounts—such as the account for section 137 expenditure—should also be included in the rate fund revenue account. Hence the main accounts, the expenditure and income of which are to be excluded from the rate fund revenue account, are specified in schedule 1. The power for my right hon. Friend to make specification under clause 1(6)(b) will enable us to cope with any other such accounts, including any such accounts established by local Acts.
In addition to revenue expenditure and income, other items of account can be included in the rate fund revenue account, such as contributions to special funds or special capital expenditure, where this conforms to proper accountancy practices.
Clause 2 provides that those practices are any practices drawn from the practices applicable to the traditional non-statutory rate fund revenue accounts in 1986–87, but taking into account variations in practice occurring from time to time. The new rate fund revenue accounts are those knitted into the traditional rate fund revenue accounts which authorities have generally kept in the past.
Amendments Nos. 6, 8 and 12 will make that clear and I commend them to the Committee. Amendments Nos. 29 and 188 would seem to be directed towards the same end, but they are defective in their purpose. Amendment Nos 29 introduces the concept of proper practices without initially anchoring the concept of the practices applicable to traditional rate fund revenue accounts in 1986–87.
Amendment No. 188 would require all the authorities to complete their accounts exclusively on the accruals basis, which I understand is not the case at the moment. I agree that this would be desirable, but it is not the intention in the Bill to regulate the way in which local authorities keep their accounts; hon. Members spoke about this in a previous debate. It is not the wish of the Government to tie down the way in which local authorities keep their accounts more than is necessary to keep it within the definitions that we need on both net and total expenditure, and other definitions that have been mentioned tonight.
Accordingly, I recommend the Committee to reject amendments Nos. 29 and 188 and to accept amendments Nos. 6, 8 and 12.

Mr. John Fraser: If I were suffering from insomnia and I had to choose between Horlicks and the Minister's speech, I would choose the Minister's speech. It dealt with some of the ground over which we went in the previous debate. I shall not take those matters further. However, I wish to draw attention to our amendment No. 29, which says that, if an item is not traditionally an item of income or expenditure, but, according to the proper practices that are observed in the accountancy profession, is, as a matter of proper practice, debited or credited to the rate revenue account, it should continue so to be debited or credited.
There is a conflict in the Bill between that which is a proper practice and that which is defined as an income or expenditure. The Minister mentioned a number of local funds, set up perhaps by local legislation or otherwise. There may be certain capital accruals to the income of the local authority. It is certainly the case that the City of London has a number of private funds—in fact, so many that clause 1 has special provisions for it. There may

be smaller endowment type funds available to local authorities or other forms of money traditionally paid into the rate revenue account. Amendment No. 29 says that, if that is defined as a proper practice, it should continue to be observed, as local authorities should not be penalised thereby.

Mr. Meadowcroft: I shall raise with the Minister a point raised in the previous debate by my hon. Friend the Member for Portsmouth, South (Mr. Hancock) which is relevant to this debate as well.
The Government are not content to rely on the provisions of the Local Government Finance Act 1982. Under section 23 of that Act, the Secretary of State is empowered to make provision with respect to
the keeping…form, preparation and certification of accounts".
If the Minister is prepared to accept the good will of the local authority associations and the chartered institute, which, in agreement with the Government, are working on a code of practice for local authority accounting that will have to pass the test of section 22, why is he introducing separate wording? Presumably the Government are trying to catch those who they do not like who are trying to shift around money in an attempt to defeat the Government's purpose of controlling local government expenditure.
The Second Reading debate has finished, and we are now debating the Bill line by line. The various provisions of the code of practice under consideration seem to me as a lay person with 15 years' experience of local government to cover all the points that the Minister is trying to put through in the Bill. The Committee deserve a response showing why it is thought that the section 23 provision is not satisfactory when local authorities are working to put together an enforceable code of practice.

Dr. Boyson: I shall reply briefly to the hon. Member for Leeds, West (Mr. Meadowcroft). This Bill is before the House because the definitions which we presumed were the definitions intended under the Local Government, Planning and Land Act 1980 had been found to be defective. That is why we have to be so careful of the wording here. I have already said that there is no intention to define more than necessary how local authorities keep their accounts. Indeed, I shall resist later certain amendments which would constrain local authorities further in the way in which they keep their accounts.

Amendment agreed to.

Mr. Allan Roberts: I beg to move amendment No. 7, in page, 2 line 6, leave out from 'authority' to end of line 7.

The Temporary Chairman: With this it will be convenient to discuss the following amendments:
No. 9, in page 2, line 12, leave out
'an account mentioned in subsection (6) below'
and insert
'another account kept by that authority'.
No. 10, in page 2, line 14, after 'to', insert 'such'.
No. 11, in page 2, line 14, leave out 'so mentioned'.
No. 13, in page 2, line 19, leave out
'an account mentioned in subsection (b) below',
and insert
'another account kept by that authority'.
No. 14, in page 2, line 21, after 'to', insert 'such'.
No. 15, in page 2, line 21, leave out 'so mentioned'.
No. 16, in page 2, line 22, leave out subsection (6).
No. 30, in page 11, line 2, leave out Schedule 1.
No. 31, in clause 2, page 2, line 46, leave out from 'income' to end of line 47.
No. 32, in clause 2, page 3, line 3, leave out from 'year' to end of line 5.
No. 149, in clause 9, page 7, line 29, leave out '1(6)'.

Mr. Roberts: I shall refer to amendments 7 and 9 specifically. On Second Reading my hon. Friend the Member for Copeland (Dr. Cunningham) said:
Clause 2 talks of 'proper practices' in connection with local government rate fund revenue account matters, but offers no definition of them. In finance law, auditors are already under a duty to ensure that councils use proper practices in their accounts. The new proposals need detailed explanation and examination of their effects on the rate support grant system."—[Official Report, 12 January 1987; Vol. 108, c. 50.]
Those amendments would do away with the need for the concept of so-called proper practices in that sense and require the Secretary of State to explain what is meant by proper practices, because he has not yet responded to the request made on Second Reading by my hon. Friend the Member for Copeland.
If we look behind the amendments, and behind the purpose of the legislation we see why this concept of so-called proper practices is being enshrined in legislation. I served on the Standing Committee that considered the 1980 Bill which became the Local Government, Planning and Land Act 1980. That Act was improperly framed and interpreted, and that has led to all this trouble. At that time, Ministers took decisions for political purposes, which have meant that during the past six or seven years they have been implementing their own legislation illegally. In fact, it was the right hon. Member for Tonbridge and Mailing (Mr. Stanley), the then Minister for Housing, who, for political purposes—because the Government had just introduced an Act encouraging local authorities to make profits on housing revenue accounts out of council tenants-was quite happy to encourage local authorities to put up rents and to make profits and use them to subsidise the ratepayers and reduce the need for central Government grant.
It was as a result of that political desire, not from any representations by Labour local authorities, that the right hon. Member for Tonbridge and Malling took the decision that any surpluses, in the housing revenue account or others—could be used as expenditure and, unlike the rate fund account, could not be treated for purposes of block grant settlements as money that was to attract penalties or clawback. That was the real position. The right hon. Member—the then Minister for Housing—made housing starts an official secret and then went off to the Ministry of Defence. He was followed by the hon. Member for Eastbourne (Mr. Gow), whom we heard earlier pleading how important the Bill was. He was another guilty Minister in the Department of the Environment who carried out the legislation in an illegal manner. He was a lawyer, yet he blames us for not realising that the legislation was illegal. All the time it was in the Government's interest to work the system in that way. That is what the Bill is all about—to allow local authorities to make profits on certain trading and other accounts, and to use that money oustide the rate fund account and without it being considered for the purposes of block grant and rate support grant penalties.
The Government found that that practice was illegal and they want to rectify the position and retrospectively

validate the money that they have given to local authorities outside the block grant. However, they now also want local authorities to follow a different procedure in running their trading and other accounts and adopt a new concept of so-called proper practices.
These amendments would remove that requirement and restore to local authorities their current discretion about items that count as expenditure and income for block grant purposes. The so-called proper practices concept is another attempt by the Government to enshrine in legislation more central Government control and restrictions over local government resources. The amendments would, quite blatantly, return to local authorities the freedom that they have always enjoyed, even under this Government, to raise revenue through the housing revenue and other accounts and not be penalised for so doing through central Government grant. If the Government would accept our amendments, many of the problems that they and local government face would be removed.
Amendment No. 9 refers to schedule 1, which lists all the different accounts that are administered by local authorities. However, the Government have also included a provision for the Secretary of State to determine any other sort of account that might not be listed in the schedule. That shows that central Government cannot control local government expenditure and examine all the details of it. Having listed 13 different accounts, separate from the rate fund account, that local authorities can administer and control, the Bill then has a catch-all provision for any other account which the Secretary of State has forgotten and which is not, therefore, listed in the schedule. That shows how inadequate the Bill is.
Amendment No. 7 would remove the requirement for local authorities to observe the so-called proper practices in compiling accounts. Those practices are not defined in the Bill, although they are effectively linked in clause 2(3) to the procedure of debits and credits laid down by the Bill for the calculation of rate fund revenue. That will be subject to specification by the Secretary of State. Again, that is more power for the Minister and less for democratically elected local government.
There is a clear danger that accounting practices, hitherto almost exclusively a professional preserve, will be determined by the Secretary of State in a political and arbitrary manner, so that once again those local authorities that the Tory Minister does not like are penalised and others let off scot free. Tammany Hall would be operating from Whitehall rather than from the town hall.
There is widespread concern about the implications of these changes, not just among people in local government but among accountants and professional auditors in the private sector and public and district auditors who work with local government. Urgent clarification is required. Our amendments should be accepted and freedom given to local government. The law must be put right.
We must not go along the road of more central control and less local government freedom. Local government must have control of their resources so that it can spend what it raises locally on services for the people without being penalised by central Government through clawback and surcharges.

Local Government Finance Bill

Mr. Kenneth Hind: It is ironic that an hon. Member representing Merseyside—the hon. Member for Bootle (Mr. Roberts)—should move a motion on proper accounting practices. I am sure that he is an expert on the financing practices of Liverpool, which seem to fall into line with many of the practices of some of the London boroughs immediately adjacent to the House of Commons. It is clear that proper accounting practices seem to have passed by most of those authorities. There are 5·8 million voters who live under these councils and it is our duty to protect them. That is why this clause and the others that follow it are necessary.

Mr. Meadowcroft: rose——

Mr. Hind: No doubt, the hon. Member for Bootle had an opportunity to scrutinise the leaked report by the Audit Commission which was published last Sunday in the Sunday Telegraph. The report considers the problems of Brent, Camden, Hackney, Haringey, Islington, Lambeth, Lewisham and Southwark and says that they are all cases for concern. The report states:
The symptoms of poor management are clear: housing in poor condition, failure to act on opportunities to reduce waste, difficulty recruiting and keeping staff and generally poor industrial relations.
The consequences are serious, with expenditure double that in similarly deprived areas even after allowing for the extra costs associated with employing people in London; poor services; a cash gap in prospect next year of £500 million—as much as 40 per cent. of current revenue expenditure in some places—and over £700 million of deferred purchase arrangements which will load on future generations of ratepayers the cost of some of today's management failures.

Mr. Martin Flannery: rose——

Mr. Meadowcroft: rose——

Mr. Hind: The hon. Member for Bootle seeks to give the Government advice on how local authorities should be run.
Hon. Members, especially Conservative Members, should bear in mind the report issued on 5 December this year which was headlined in The London Standard and said that London was going broke. It is going broke because Labour authorities throughout Britain are deferring payment on revenue in the hope, according to the leader of Islington council, that a Labour Government will bail them out.

Mr. Flannery: rose——

Mr. Meadowcroft: rose——

Mr. Hind: I give way to the hon. Member for Leeds, West (Mr. Meadowcroft).

Mr. Meadowcroft: I would express no particular love or support for the accounting practices of the local authorities mentioned by the hon. Gentleman. Perhaps he will answer the questions that I always want to ask Conservative Members who make this point. If these abuses are so blatant, why are the hon. Gentleman and his Conservative friends in those authorities incapable of persuading the voters to throw out the councillors? Why do these 5 million people still live under the type of political control that the hon. Gentleman regards as so reprehensible? Why do the hon. Gentleman and his

political colleagues have such an inferiority complex that they believe that it is impossible to get rid of those authorities, except by Government diktat? Is the hon. Gentleman aware that in the Sefton metropolitan district, from which the hon. Member for Bootle (Mr. Roberts) comes, the Conservative party lost control last May? It is a matter not only of dislinking the accounting elsewhere but of the Conservative party not being able to cope locally.

Mr. Hind: The Liberal party has the same trouble in dislodging the Labour party in those areas as we do.

Mr. Ron Leighton: Surely, the hon. Gentleman believes in democracy.

Mr. Hind: Of course, we believe in democracy. As I understand it, the hon. Member for Leeds, West (Mr. Meadowcroft) is saying that he deprecates the practices that are followed by those authorities.

Mr. Meadowcroft: indicated assent.

Mr. Hind: I am glad that the hon. Gentleman agrees. Is he saying that he has the same difficulty in dislodging Labour councillors? Perhaps the hon. Gentleman would agree that by the use of the debating system in the House we shall at least have the opportunity to expose to a much wider audience the bad practices in those authorities.

Mr. Flannery: rose——

Mr. Hind: If we sit back, do nothing about it and allow it to go on, it will be swept under the carpet by Opposition Front Bench spokesmen who have no control over the people in Labour-controlled local authorities. It is up to us to expose it. The hon. Member for Blackburn (Mr. Straw), who is in the Chamber, went to Liverpool to try to persuade Liverpool council to modify its policies. He was sent back to Westminster with his tail between his legs. That does not bode well for the future if a Labour Government are ever allowed to take office. Those are the factors we have to bear in mind.

Mr. Flannery: rose——

Mr. Hind: I have nearly finished. The hon. Gentleman can then say his piece.
In the light of the Auditor General's report and the other reports before us about the practices in the bad Left-wing Labour run authorities, how can anybody give Conservative Members a lecture on proper accounting practice?

Mr. Allan Roberts: I do not know which of the practices of Liverpool city council to which the hon. Member for Lancashire, West (Mr. Hind) objects. I do not know whether it is the policy of refusing to put up the rates or its policy of selling off assets so that it can get money for capital receipts. However, may I point out to the hon. Gentleman that I do not represent a Liverpool constituency. I represent Bootle, which is in Sefton. I am concerned about proper practices in local government. However, proper practice in terms of these amendments is about how local authorities organise their accounts, especially those without the rate fund revenue account.
I would be happy to examine the practices of Sefton council when it was Conservative controlled. In the same year as it closed a school for the physically handicapped, it used ratepayers' money to build a statue of Red Rum in Southport.

Mr. Flannery: In 1985 the controller of the Audit Commission spoke about Sheffield. He said:
The city is well managed and other cities can learn from Sheffield which provides outstanding value for money.
Does my hon. Friend think that Sheffield will get any mercy from the Government, no matter how good it was or how good the Audit Commission thought it was?

Mr. Roberts: My hon. Friend is quite right. However, Sheffield Labour council is rewarded by the electors in Sheffield who continue to re-elect overwhelmingly a Labour council.
As I was saying, in the same year as the Sefton Tory council closed learner swimming pools it bought fairy lights for Lord street in Southport with ratepayers' money. In the same year as the school children were sharing text books in the schools the council refused to give discretionary grants to students who obtained places in colleges of further and higher education. Those discretionary grants were provided by every Labour controlled local authority in Merseyside. It was the lowest rated metropolitan district in the country with 30 per cent. unemployment levels. Did the low rates drive the jobs away as we are accused of driving them out of Liverpool and elsewhere.

Mr. Patrick McLoughlin: Will the hon. Gentleman give way?

Mr. Roberts: No, I want to get back to the amendments. Let us have some sensible answers from the Minister. Will he tell us what proper accounting means? Why is it needed when district and other auditors cannot see the need and when there are already necessary checks and balances? Why have the Government got themselves into such a mess that they have to introduce this sort of legislation which takes more powers and rights away from local government and goes further by preventing it from using money it has raised through its own efforts. The Government are now taking control of how the rates are raised, what level they are raised to and how they are spent. In the legislation that we are trying to amend, the Government are taking control of the money raised by local authorities on every account that they run, from the housing revenue account to the money collected from the municipal laundries. Does not the Minister think that that is nonsense?

Mr. Hancock: Yet again we have come full circle to the words "proper practices". I hope that the Minister will now afford the House the pleasure of hearing his interpretation of the meaning of those words. The alliance will support the amendments and I hope that the "Labour" party will force a Division as these points are crucial to the essence of local democracy.
The hon. Member for Lancashire, West (Mr. Hind) referred to the problems that he envisaged would arise through the leaked report from the Audit Commission. He enthused about the ability of the House to talk a local authority out of existence. That was extreme folly. The only way in which local authorities should continue to be put out of power is through the ballot box. The Government's mistaken circus adventure involving the abolition of the metropolitan counties must never be repeated. The hon. Gentleman's "enthusiasm" for that form of local democracy—if that is the right word—is something that the Committee should oppose. I hope that this Conservative Government will learn that the mistake

that they made previously by relieving people of a form of local government that they did not like, will ultimately cost more than the Government were hoping to save.
What is wrong with the present system? Why is it so bad that we have to go through this exercise? Time and again alliance Members have tried to get that message across and glean from the Minister what is wrong with local government finance. I am no supporter of the Labour party, but I know that the Under-Secretary of State for the Environment, the hon. Member for Southampton, Itchen (Mr. Chope), would find it difficult to fault the way in which the Labour-controlled authority in Southampton has acted. The people in Southampton find very little to condemn. As a member of the county council, I have strained very hard to find fault with the Labour party line. Undoubtedly it has pushed its credibility to extremes on occasions, but its main financial thrust and the way in which it has controlled expenditure in Southampton is a lesson for us all.
I draw the Under-Secretary of State's attention to the position in Hampshire. He may smile, but would he care to come to the Dispatch Box and tell us about that council which, year in year out, followed the Government's rules to the letter but in which there was a 14 per cent rate increase last year and in which there is predicted to be a 12 per cent. rise this year? Despite the best efforts of the Secretary of State to impose a form of local government on a Conservative-controlled local authority, he has failed miserably. The only way in which the people of Hampshire have benefited in the past 18 months is through the advent of a virtually balanced council. At least they have better services for the increased rates. However, for five or six years they suffered rate increases and received very little, if anything, in return.
The Minister must explain what "proper practices" means and tell us what practices he is so against which so mysteriously and at long last have warranted the Bill. What will the Minister abolish in schedule 1? What will he make it difficult for local authorities to achieve? Will he tell a local authority, which may have an enterprising activity such as a ferry port from which it may derive wide revenue and for which it may have put away money for development, that that reserve fund for future capital expenditure should not exist? Is he claiming that that money should go into the general rate fund and so erode the pressure to rekindle the enthusiasm for jobs in the dock areas or in the inner cities? Will that type of fund no longer be legal? We need to know, because many local authorities gain income from such activities which would no longer be able to go into so many useful things if the Bill were accepted.
The phrase "proper practices" can be defined in many ways, and I hope that the Minister will give us the benefit of his interpretation.

Dr. Boyson: I do not think that the two and a half sides of the Committee are as far apart here as some speeches have implied.
We all enjoyed listening to my hon. Friend the Member for Lancashire, West (Mr. Hind), who drew attention to the importance of the Audit Commission report, which we will all read carefully when it is published.
Clauses 1 and 2 and schedule 1 set up the rate fund revenue account. The aim is that rate fund revenue accounts should conform to the way in which authorities have generally kept their traditional, but non-statutory,


rate fund revenue accounts. Our intention is not to change current practice but, as far as possible, to make the traditional methods more common so that they can be checked. The amendments have that intention as well.
Rate fund revenue accounts might, however, differ from the traditional way in which authorities have kept their main revenue accounts. The amendments would reduce authorities' freedom to keep accounts as they want. I do not believe that that is their intention, and it is not the Government's aim. I ask the Committee to reject the amendment, not because it increases authorities' freedom but because it restricts it. Clauses 1 and 2 and schedule 1 are, as far as possible, based on the best methods used by local authorities.

Question put, That the amendment be made:—

The Committee divided: Ayes 167, Noes 219.

Division No. 60]
[10.57 pm


AYES


Abse, Leo
Evans, John (St. Helens N)


Adams, Allen (Paisley N)
Fatchett, Derek


Alton, David
Field, Frank (Birkenhead)


Anderson, Donald
Fields, T. (L'pool Broad Gn)


Archer, Rt Hon Peter
Fisher, Mark


Ashley, Rt Hon Jack
Flannery, Martin


Atkinson, N. (Tottenham)
Foot, Rt Hon Michael


Banks, Tony (Newham NW)
Forrester, John


Barron, Kevin
Foster, Derek


Beckett, Mrs Margaret
Fraser, J. (Norwood)


Bell, Stuart
Freeson, Rt Hon Reginald


Benn, Rt Hon Tony
Freud, Clement


Bidwell, Sydney
Garrett, W. E.


Blair, Anthony
George, Bruce


Boyes, Roland
Gilbert, Rt Hon Dr John


Bray, Dr Jeremy
Golding, Mrs Llin


Brown, Gordon (D'f'mline E)
Gould, Bryan


Brown, Hugh D. (Provan)
Hamilton, James (M'well N)


Brown, N. (N'c'tle-u-Tyne E)
Hancock, Michael


Brown, R. (N'c'tle-u-Tyne N)
Hardy, Peter


Brown, Ron (E'burgh, Leith)
Harrison, Rt Hon Walter


Buchan, Norman
Hart, Rt Hon Dame Judith


Caborn, Richard
Heffer, Eric S.


Callaghan, Jim (Heyw'd &amp; M)
Hogg, N. (C'nauld &amp; Kilsyth)


Campbell, Ian
Holland, Stuart (Vauxhall)


Campbell-Savours, Dale
Home Robertson, John


Canavan, Dennis
Howells, Geraint


Carter-Jones, Lewis
Hoyle, Douglas


Clark, Dr David (S Shields)
Hughes, Robert (Aberdeen N)


Clarke, Thomas
Hughes, Roy (Newport East)


Clay, Robert
Hughes, Sean (Knowsley S)


Clelland, David Gordon
John, Brynmor


Clwyd, Mrs Ann
Jones, Barry (Alyn &amp; Deeside)


Cocks, Rt Hon M. (Bristol S)
Kaufman, Rt Hon Gerald


Cohen, Harry
Kirkwood, Archy


Coleman, Donald
Lambie, David


Conlan, Bernard
Lamond, James


Cook, Frank (Stockton North)
Leadbitter, Ted


Corbyn, Jeremy
Leighton, Ronald


Cox, Thomas (Tooting)
Lewis, Terence (Worsley)


Crowther, Stan
Litherland, Robert


Cunliffe, Lawrence
Livsey, Richard


Cunningham, Dr John
Lloyd, Tony (Stretford)


Dalyell, Tam
Lofthouse, Geoffrey


Davis, Terry (B'ham, H'ge H'l)
Loyden, Edward


Deakins, Eric
McCartney, Hugh


Dewar, Donald
McDonald, Dr Oonagh


Dixon, Donald
McGuire, Michael


Dobson, Frank
McKay, Allen (Penistone)


Dormand, Jack
McNamara, Kevin


Douglas, Dick
McTaggart, Robert


Dubs, Alfred
McWilliam, John


Dunwoody, Hon Mrs G.
Madden, Max


Eadie, Alex
Marek, Dr John


Eastham, Ken
Marshall, David (Shettleston)





Martin, Michael
Rowlands, Ted


Mason, Rt Hon Roy
Sheerman, Barry


Maxton, John
Sheldon, Rt Hon R.


Maynard, Miss Joan
Shields, Mrs Elizabeth


Meacher, Michael
Shore, Rt Hon Peter


Meadowcroft, Michael
Short, Ms Clare (Ladywood)


Michie, William
Short, Mrs R.(W'hampt'n NE)


Mitchell, Austin (G't Grimsby)
Silkin, Rt Hon J.


Morris, Rt Hon J. (Aberavon)
Skinner, Dennis


Nellist, David
Smith, C.(Isl'ton S &amp; F'bury)


Oakes, Rt Hon Gordon
Snape, Peter


O'Brien, William
Soley, Clive


O'Neill, Martin
Spearing, Nigel


Park, George
Steel, Rt Hon David


Parry, Robert
Stott, Roger


Patchett, Terry
Straw, Jack


Pavitt, Laurie
Thompson, J. (Wansbeck)


Pendry, Tom
Thorne, Stan (Preston)


Powell, Raymond (Ogmore)
Wallace, James


Radice, Giles
Wardell, Gareth (Gower)


Randall, Stuart
Welsh, Michael


Raynsford, Nick
White, James


Redmond, Martin
Williams, Rt Hon A.


Rees, Rt Hon M. (Leeds S)
Winnick, David


Richardson, Ms Jo
Woodall, Alec


Roberts, Allan (Bootle)
Young, David (Bolton SE)


Roberts, Ernest (Hackney N)



Robinson, G. (Coventry NW)
Tellers for the Ayes:


Rogers, Allan
Mr. Ron Davies and


Rooker, J. W.
Mr. Frank Haynes.


Ross, Ernest (Dundee W)



NOES


Ancram, Michael
Havers, Rt Hon Sir Michael


Best, Keith
Hawkins, Sir Paul (N'folk SW)


Biffen, Rt Hon John
Hawksley, Warren


Body, Sir Richard
Hayes, J.


Bottomley, Peter
Hayhoe, Rt Hon Sir Barney


Boyson, Dr Rhodes
Heathcoat-Amory, David


Chope, Christopher
Henderson, Barry


Cockeram, Eric
Heseltine, Rt Hon Michael


Coombs, Simon
Hickmet, Richard


Cope, John
Hicks, Robert


Currie, Mrs Edwina
Higgins, Rt Hon Terence L.


Dorrell, Stephen
Hind, Kenneth


Douglas-Hamilton, Lord J.
Hirst, Michael


Fallon, Michael
Holland, Sir Philip (Gedling)


Farr, Sir John
Holt, Richard


Favell, Anthony
Howarth, Alan (Stratf'd-on-A)


Fenner, Dame Peggy
Howarth, Gerald (Cannock)


Finsberg, Sir Geoffrey
Howell, Rt Hon D. (G'ldford)


Fletcher, Sir Alexander
Howell, Ralph (Norfolk, N)


Fookes, Miss Janet
Hubbard-Miles, Peter


Forman, Nigel
Hunt, David (Wirral W)


Forsyth, Michael (Stirling)
Hunt, John (Ravensbourne)


Forth, Eric
Irving, Charles


Fox, Sir Marcus
Jackson, Robert


Franks, Cecil
Jessel, Toby


Fraser, Peter (Angus East)
Johnson Smith, Sir Geoffrey


Freeman, Roger
Jones, Gwilym (Cardiff N)


Gale, Roger
Jones, Robert (Herts W)


Galley, Roy
Joseph, Rt Hon Sir Keith


Gardiner, George (Reigate)
Kershaw, Sir Anthony


Glyn, Dr Alan
Key, Robert


Goodlad, Alastair
King, Roger (B'ham N'field)


Gow, Ian
Knight, Greg (Derby N)


Grant, Sir Anthony
Knight, Dame Jill (Edgbaston)


Greenway, Harry
Knowles, Michael


Griffiths, Sir Eldon
Knox, David


Griffiths, Peter (Portsm'th N)
Lamont, Rt Hon Norman


Grist, Ian
Lang, Ian


Ground, Patrick
Latham, Michael


Grylls, Michael
Lawler, Geoffrey


Hamilton, Hon A. (Epsom)
Lawrence, Ivan


Hamilton, Neil (Tatton)
Lee, John (Pendle)


Hanley, Jeremy
Leigh, Edward (Gainsbor'gh)


Hannam, John
Lester, Jim


Hargreaves, Kenneth
Lightbown, David


Harris, David
Lilley, Peter


Haselhurst, Alan
Lloyd, Sir Ian (Havant)






Lloyd, Peter (Fareham)
Shaw, Giles (Pudsey)


Lord, Michael
Shaw, Sir Michael (Scarb')


Lyell, Nicholas
Shelton, William (Streatham)


McCrindle, Robert
Shepherd, Richard (Aldridge)


Macfarlane, Neil
Shersby, Michael


MacGregor, Rt Hon John
Silvester, Fred


Maclean, David John
Skeet, Sir Trevor


McLoughlin, Patrick
Smith, Sir Dudley (Warwick)


McNair-Wilson, M. (N'bury)
Smith, Tim (Beaconsfield)


McNair-Wilson, P. (New F'st)
Soames, Hon Nicholas


McQuarrie, Albert
Speed, Keith


Madel, David
Spencer, Derek


Major, John
Spicer, Jim (Dorset W)


Malins, Humfrey
Spicer, Michael (S Worcs)


Malone, Gerald
Squire, Robin


Maples, John
Steen, Anthony


Marland, Paul
Stevens, Lewis (Nuneaton)


Marlow, Antony
Stewart, Allan (Eastwood)


Marshall, Michael (Arundel)
Stewart, Andrew (Sherwood)


Mates, Michael
Stewart, Ian (Hertf'dshire N)


Mather, Sir Carol
Stokes, John


Maude, Hon Francis
Stradling Thomas, Sir John


Maxwell-Hyslop, Robin
Sumberg, David


Merchant, Piers
Taylor, John (Solihull)


Meyer, Sir Anthony
Taylor, Teddy (S'end E)


Miller, Hal (B'grove)
Tebbit, Rt Hon Norman


Mills, Iain (Meriden)
Temple-Morris, Peter


Moate, Roger
Terlezki, Stefan


Montgomery, Sir Fergus
Thomas, Rt Hon Peter


Morris, M. (N'hampton S)
Thompson, Donald (Calder V)


Morrison, Hon P. (Chester)
Thompson, Patrick (N'ich N)


Moynihan, Hon C.
Thorne, Neil (Ilford S)


Nelson, Anthony
Thornton, Malcolm


Neubert, Michael
Thurnham, Peter


Nicholls, Patrick
Townend, John (Bridlington)


Onslow, Cranley
Trippier, David


Oppenheim, Rt Hon Mrs S.
Trotter, Neville


Ottaway, Richard
Twinn, Dr Ian


Page, Sir John (Harrow W)
van Straubenzee, Sir W.


Page, Richard (Herts SW)
Vaughan, Sir Gerard


Parkinson, Rt Hon Cecil
Waddington, Rt Hon David


Patten, J. (Oxf W &amp; Abgdn)
Waldegrave, Hon William


Pawsey, James
Walker, Bill (T'side N)


Pollock, Alexander
Waller, Gary


Porter, Barry
Ward, John


Powell, William (Corby)
Wardle, C. (Bexhill)


Powley, John
Watts, John


Price, Sir David
Wells, Bowen (Hertford)


Proctor, K. Harvey
Wells, Sir John (Maidstone)


Raffan, Keith
Wheeler, John


Rathbone, Tim
Whitfield, John


Rhodes James, Robert
Whitney, Raymond


Rhys Williams, Sir Brandon
Wiggin, Jerry


Ridley, Rt Hon Nicholas
Wilkinson, John


Ridsdale, Sir Julian
Wolfson, Mark


Roberts, Wyn (Conwy)
Wood, Timothy


Robinson, Mark (N'port W)
Woodcock, Michael


Roe, Mrs Marion
Yeo, Tim


Rossi, Sir Hugh
Young, Sir George (Acton)


Rost, Peter
Younger, Rt Hon George


Rowe, Andrew



Ryder, Richard
Tellers for the Noes:


Sackville, Hon Thomas
Mr. Tony Durant and


Sainsbury, Hon Timothy
Mr. Mark Lennox-Boyd.


Sayeed, Jonathan

Question accordingly negatived.

Amendments made: No. 8, in page 2, line 8, leave out 'The' and insert
'For the purposes of subsection (3) above defined revenue'.

No. 12, in page 2, line 15, leave out 'The' and insert
'For the purposes of subsection (3) above defined revenue'.—[Dr. Boyson.]

Mr. Allan Roberts: I beg to move amendment No. 18, in page 2, line 25, leave out paragraph (b).
To some extent it relates to the debate on the previous amendments on which the Committee has just voted. The

amendments that were not accepted—they were defeated in the Lobbies—would have removed the way in which the Government wish local authorities to calculate their proper expenditure. This amendment is even more necessary. It attempts to rectify the legislation. It is not a wrecking amendment, but one that will improve the legislation, and the Government should accept it in that spirit. However, the amendment draws attention to the fact that the Secretary of State is taking even more powers. Clause 1(6)(b) states:
any other account specified in respect of the year concerned by the Secretary of State.
In other words, again referring to schedule 1, the Secretary of State lists in his legislation 13 accounts that local authorities keep, other than the rate fund account. Schedule 1 starts with the housing revenue account and it includes the housing repairs account. It refers to such accounts as
a trading undertaking (whether the undertaking is owned by the authority concerned individually or as a member of a joint committee).
It takes account of any trading that can take place not only by the local authority alone but as a member of a joint committee. Such matters as local authority-owned airports are covered. Paragraph 4 refers to
Any account of any fund established under section 15(1) of the Public Libraries and Museums Act 1964.
Paragraph 5 refers to anything done in regard to goods and services under the Local Authorities (Goods and Services) Act 1970. Paragraph 6 refers to
Any account of any fund known as a superannuation fund and maintained under regulations made under section 7 of the Superannuation Act 1972.
All that is covered. Paragraph 7 refers to
Any account of a loans fund established under paragraph 15 of Schedule 13 to the Local Government Act 1972.
It covers a range of accounts that local authorities keep. Paragraph 8 deals with
Any account of any fund established under paragraph 16 of Schedule 13 to the Local Government Act 1972.
The paragraph covers many other accounts that local authorities keep. Paragraph 9 refers to lottery funds. Sefton council holds a lottery to raise money. From the proceeds of that lottery, the council is able to fund all types of worthwhile, mainly voluntary joint efforts. That will be controlled and proper accounts will have to be kept. Any money raised from a lottery will count against a local authority's expenditure of it. As with money raised from rates, the Government will count money for penalty or for claw-back. Any pound raised from a lottery fund will mean that the local authority could lose another £1 or £2 in rate support grant. That is iniquitous. Paragraph 10 relates to
Any account kept by virtue of section 10(1)(i) of the 1980 Act (direct labour organisations).
Any profits made by a direct labour organisation that are spent by a local authority can be clawed hack by way of the grant claw back or penalties. Paragraph 11 relates to
Any account kept by virtue of section 55(1) of the Road Traffic Regulation Act 1984 (parking places).
Any money raised by virtue of a sensible policy to get revenue from parking will be subject to the penalties, the clawbacks and the block grant controls—the detailed controls of central Government interfering even with money raised in a parking account.
Schedule 1 also includes any account kept by virtue of section 3(4)(a)(i) of the Further Education Act 1985. The schedule is all-embracing. Finally, the schedule includes


Any account of any fund known as a metropolitan debt administration fund and operated under any order made under section 66 of the Local Government Act 1985.
11.15 pm
I have gone through the list of accounts to demonstrate that the schedule is comprehensive. However, even after keeping proper accounts, money spent by local authorities will be controlled by the Government and treated as rate fund expenditure. They will apply penalties and clawback. Clause 1(6)(b) refers to
any other account specified in respect of the year concerned by the Secretary of State.
If the Department of the Environment gets it wrong again and does not include every account, however small—perhaps the petty cash that teachers use to buy equipment that is not provided by the education authority because the rate support grant has been slashed—the authority could be designated by the Secretary of State. He will be able to ensure in the minutest detail that the revenue of local authorities is controlled by him and central Government. Big brother knows best. No local authority resources will be allowed to escape the net.
This Government have encouraged profit-making on the housing revenue account. They have raised money through increasing council house rents. Under the 1980 Act the Government introduced a system whereby the Secretary of State designated the contribution to the housing revenue account by means of rent levels. Since 1980, rent increases have been determined by the Secretary of State. If a Labour-controlled council did not increase its council house rents by the amount determined by the Secretary of State or by the Department of the Environment's computer, the Secretary of State deemed that rents had been increased by that amount and reduced accordingly the housing revenue account subsidy. The system was designed to encourage housing revenue account surpluses which could be used to subsidise the rate fund account.
The housing revenue account surpluses have been used by many authorities. For example, Sefton was under Tory control until May 1986, when they were thrown out. Until then they increased rents to such an extent that they had a housing revenue account surplus of £2 million. In previous years that money was used to subsidise the rate fund. This year, with the Liberals supporting the larger Labour group on Sefton council, it will be used for the benefit of council tenants. It is their money. At last some repairs may be done, now that the Tories are not controlling that council. Money has been taken away from council tenants and used to subsidise the rate fund, but under the Bill it will also be used to calculate block grant. Whereas previously, in conjunction with local authorities after representations from the Tory local authority associations, it was excluded from the calculations, and every pound that was spent from a surplus on the housing revenue account did not attract penalties, it will now attract them. That is the intent and the purpose, all because the Government claim that these trading accounts, these revenue accounts which are not rate fund accounts, have been used by local authorities "to avoid penalties." All the local authorities have been doing is using the money that they have made locally for the purposes that they thought fit to benefit their electors and the citizens who live in their areas.
The Department of the Environment and the combined brains of Ministers have come up with this catch-all list in schedule 1. It is not unreasonable for us not to give the Secretary of State power to specify anything else in respect of the year concerned. If the Bill becomes an Act and that schedule applies without the provision that we are trying to take out by our amendment, at least local authorities will know where they stand. They will not have an account with moneys coming in from capital receipts or from a residual body that they think, because of the way that the schedule is written, can be used without attracting penalty, and then halfway through the year somebody—perhaps a councillor of an opposition party—telephones the Secretary of State and says "Do you know that they have this account? They have made some money in this way and are spending it for the benefit of the ratepayers or citizens of their area, but we think it should attract grant. Designate it; specify it in this specific year." That is an intolerable situation of the kind that the Government continually put local government into.
The Department of the Environment says that the purpose of clause 1(6)(b) is to allow the Secretary of State to add any account that may have escaped his attention because it is found in local legislation, but there are byelaws that allow for it. If that is so, this paragraph is drafted too widely, and before Parliament approves such a power the Secretary of State should give examples of what he has in mind. We could put another amendment down, and perhaps the Minister would on Report table an amendment that applies to a specific authority because of a local byelaw which affects them. That might be an improvement, because local authorities could look at the local Acts and would know what accounts were involved. That would be fairer than this, but why it is necessary we do not know.
We have now reached a parlous situation where there is detailed legislation to take control of the day-to-day running of administration of local authority accounts. When that is necessary, it shows the state that the Government have got into with this legislation, and it proves that it is impossible for the Government, Whitehall or computers run by the Department of the Environment civil servants to know more about a local community, its needs, revenue and affairs than the councillors elected by the local people.

Mr. Meadowcroft: Does the wording of the clause encompass any new account that the Minister might devise, name or list, which is peculiar to one authority, or does it have to be one that is common to all authorities in a particular category? The clause, as drafted, is ambiguous and could apply to one authority. We may then have the problems outlined by the hon. Member for Bootle (Mr. Roberts), and a local authority may be singled out by the Government because they dislike how the authority runs its accounts, and may try to find one aspect to delineate.
If that is the case, the Government's problem is twofold. First, if the clause specifies a particular council, that puts the Bill in difficulty with regard to hybridity. It would single out one authority from another. On the other hand, if the Government wished to catch a particular local authority of whose practices they did not approve by trying to set up a particular type of account, it would probably be impossible to find a form which would cover all the different ones.
The hon. Gentleman talked about the different accounts listed in the schedule. But there are other kinds of accounts which at present, legitimately and openly, local authorities keep. Let me give one example. In 1969 or 1970 the Leeds council took over the theatre. For tax purposes, and because of the way in which it wanted to run the theatre, the council established the Leeds Grand Theatre and Opera Co. Ltd. All the directors are appointed by the council, but nevertheless it is a separate corporate entity and as such it has separate accounting procedures. As far as I can see, that instance is not covered in the schedule. At present, there are no difficulties and because the theatre, like virtually every theatre, makes a loss, although not a huge loss, it is subsidised out of the rates and the rate fund shows that particular subsidy.
If there were such an entity, in the category of a separate body, but nevertheless in association with the council, the effect of what the Government are trying to do might well he to encourage secrecy. That is the ironic thing. Because a council might be worried about what might happen in the next year or the year after, it might seek to turn away from the open road of publishing all its accounts so that it could put money in its back pocket to put money back into the rate fund account in future years. Once the trust that has existed in local government for so many years is destroyed, the secrecy and problems with which the Government seek to deal are bred.
Clause 1(6)(b) is particularly dangerous in further damaging that kind of relationship. It sets aside the exercise now going on with the Chartered Institute of Public Finance and Accountancy to try to work out a code of practice for accountants between all the local authority associations in conjunction with the Minister's officials which it would then be incumbent on all local authorities to follow. That is the better road down which to go, and so the amendment is worthy of support.

Mr. Gordon Oakes: I have not so far burdened the Committee with my views, but I want to take two minutes of the Committee's time. I entirely agree with my hon. Friend the Member for Bootle (Mr. Roberts) and the hon. Member for Leeds, West (Mr. Meadowcroft).
I have two objections to the clause. One is that it is sloppy. If the Government intend to take all accounts into consideration, why do not they say so? Why have a schedule to the Bill? Why not merely say in the clause that all accounts are subject to the Secretary of State? In effect, that is what clause 1(6)(b) does.
I speak as vice-president of the Association of County Councils, which is most concerned about this because it does not know which accounts will be affected. The Secretary of State can jump anywhere he likes on a particular account at any time he likes. Accountants and county and local authority treasurers will bear the Bill in mind. They are law-abiding citizens. They will try to operate within its terms. But suddenly the Secretary of State can, under subsection (6)(b), designate an account as one that must come to his attention. The treasurers, councillors and others involved will not be aware of that when they set up an account. The Government are creating confusion.
If the Government want to do this, they should say "all accounts", and do without schedule 1. Anything that local government does can come within the purview of the Minister, and he should have the guts to say that that is

so. I disagree with it, but the Government are trying to create a schedule on particular accounts, and then saying that they can jump anywhere else that they like.
11.30 pm
The hon. Member for Leeds, West mentioned accounts in his city. In my constituency, another example springs to mind. We are instituting a chemical industry museum. We have a lot of money from the Government, for which we are grateful, and it is going into an industrial archaeological site. My authority would never believe that the account for that project would come under the provisions of the Bill, but the Secretary of State could say that it would, even though it is a charity, because he wants it to. This is a charity well supported by industry. It is the only museum of its type in western Europe, and it is run by the council. Why should this provision apply to such a project?
If the Government want a catch-all, they should have the guts to say so, and make the Bill apply to all accounts. If they do not mean that, they should not put local government in the position that they do not know what will happen to a particular account, as the Bill does.

Dr. Boyson: I am glad to respond to the debate, because we can put at rest the minds of those who have spoken. I know that both the right hon. Member for Halton (Mr. Oakes) and the hon. Member for Leeds, West (Mr. Meadowcroft) have much experience in local government.

Dr. Cunningham: So does my hon. Friend the Member for Bootle (Mr. Roberts).

Dr. Boyson: I am grateful for that intervention. The hon. member for Bootle (Mr. Roberts) also has great experience.
The expenditure in the accounts specified will not be taken into account for block grant. The list is there to ensure that is will not be counted as relevant expenditure. It is to the advantage, not to the disadvantage, of local authorities that this schedule exists. I know that hon. Members did not wish to imply that the provisions of the schedule will mean that the profits of, for example, direct labour organisations, will lead to grant clawback. The point of specifying these accounts is to ensure that expenditure and income debited or credited to them is not included in the rate fund revenue account. If this expenditure and income were so excluded, the rate Fund revenue account would differ from that traditionally held by authorities, and would not be maintaining the status quo. We want to retain the status quo and exclude the specified items from the block grant account related expenditure.

Mr. Allan Roberts: I understand that if the money that is collected in these accounts, whether they are in surplus or not, is spent within the account so that, for example, money within the housing revenue account is spent for housing revenue account purposes, it does not count for block grant penalties. If the money is transferred from the account to be spent on purposes that otherwise rate fund income would be spent on, would it then be counted in terms of block grant calculation?

Dr. Boyson: If the specified money is in the separate accounts, it is not part of the block grant, but if it is transferred and spent as block grant, another situation arises. If it were not established in this way, it would be to the disadvantage of the local authorities. For the


advantage of local authorities, and to continue traditional practices, we have framed the clause and the schedule as they are. If we accepted the amendment, it would be to the serious disadvantage of local authorities.

Mr. Tony Banks: I wanted to wait until I heard the Minister to see whether I could better understand this part of the Bill. Amendment No. 18 seeks to remove subsection (6)(b). Although I appreciate that subsection (6)(a), referring to a schedule, gives a list of accounts, how can this protect local authorities? To give the Secretary of State the ability to specify any account in respect of any year cannot protect a local authority. I do not understand that argument.
That must mean that if the local authority came up with an account, or if another account was discovered of which the Department of the Environment was unaware, the Secretary of State could be advised by his civil servants to specify that account. How does that protect local authorities? It is simply another catch-all so that, if the Secretary of State or his advisers have missed something—it is a fair bet that they might have done, given the complexity of the legislation—the advisers can come along and say, "By the way, Minister, it appears that we have missed this account which the authority is using for this purpose. We are sure you do not agree with it and we think that you should specify it using the powers that you have in the Act."
Will the Minister explain how that can be to the benefit of a local authority desperately trying to protect its jobs and services? How will it do anything to add to the understanding of local government finance? How can it bring consistency to the advice that local councillors will be receiving from their officers? Whatever the legislation does, it is not specific in this respect. How will this part of subsection (6)(b) be to the advantage of a local authority?

Mr. Allan Roberts: I am glad to have the Minister's confirmation that any money from the housing revenue account, upwards or downwards, which is transferred to the rate fund account and is spent on services on which, otherwise, rate income would be spent, would qualify in terms of the block grant calculations and would be included in the calculations for penalties. Will Conservative Members vote for legislation that will discourage Tory local authorities from taking surpluses from housing revenue and other trading accounts and spending that money on services which, if not provided with that money, would either not be provided at all or would be provided through an increase in the rates? That is what the Minister has just said. He is introducing a disincentive for a Labour or Conservative local authority to make a profit on its housing revenue account and use the surplus for purposes for which otherwise the rate fund would have to pay. It seems that I was right. The Government have got themselves in a topsy-turvey world of legislation to try to control the day-to-day, detailed affairs of local government.
If the amendment is not accepted, my advice to Conservative as well as Labour local authorities is not to make surpluses on their housing revenue accounts. If they do, they should spend the money on their council tenants so that they will not be penalised. If they spend it on subsidising the rate fund, they will be penalised. I would like all councils to do the former, anyway.

Dr. Boyson: As I explained in the debate on an earlier group of amendments relating to clauses 1 and 2, the power of my right hon. Friend the Secretary of State to make specifications under clause 1(6)(b) will enable us to deal with accounts other than those in schedule 1, expenditure on and income from which should not be included in rate fund revenue accounts. Expenditure in accounts which are specified in the schedule will not be taken into account for block grant because it will not be counted as relevant expenditure.
I must say how delightful it is to see the hon. Member for Newham, North-West (Mr. Banks) with a copy of the Daily Telegraph. That makes us believe in the forgiveness of sins and the salvation of all men. What a glorious sight is the hon. Gentleman. That is the sort of scene from which a postcard could be made. Whether that postcard should count as relevant expenditure or come under a non-total——

Mr. Tony Banks: The Minister has commendable eyesight. I am sure that I could not have seen that newspaper had it appeared on the Conservative Benches. I am reading a story on the front page of the Sunday Telegraph, which is nothing more than Tory party propaganda—as one would expect from the Sunday Telegraph and the Daily Telegraph. I hope that we shall have a chance to refer to it later.

Dr. Boyson: I must not be diverted by the hon. Gentleman with his usual skill. However, one may be redeemed on one day of the week, and what holier day is there than Sunday? If there is redemption on Sunday, it could come on Monday and Tuesday. I shall bring my own Daily Telegraph in future and offer it to the hon. Gentleman, and all hon. Members may watch his progress as he slowly moves towards the Conservative Benches. Such conversions have happened in history, such as on the road to Damascus.
We have had a good debate on the amendment and I realise the honesty and concern of all hon. Members. I advise the House to reject the amendment because I do not believe that, if it were accepted, it would be to the advantage of local authorities.

Mr. Allan Roberts: In the light of the clear explanation that the Minister has given, I am happy that advice will go out from the Minister to Conservative and Labour councils not to spend surpluses or money raised from housing revenue and other accounts on the ratepayers, but to spend it for the purpose for which it was raised.
I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

To report Progress and ask leave to sit again.—[Dr. Boyson.]

Committee report Progress; to sit again tomorrow.

PRIVATE BILL PROCEDURE

Ordered,
That, in accordance with the Resolution of 16th June, in the last Session of Parliament, a Select Committee of seven Members be appointed to join with a Committee to be appointed by the Lords to examine the process of enacting Private Legislation and to consider whether:

(a) there are any matters of a kind at present dealt with by Private Bill which could more appropriately be dealt with some other way, taking account of the interests both of Promoters and other affected parties;
(b) any changes are desirable in Private Bill procedure; and


(c) any amendments are desirable to the Private Legislation Procedure (Scotland) Act 1936 and the procedure thereunder;

and to consider whether any amendments are desirable to the Statutory Orders (Special Procedure) Act 1945.

Ordered,
That the Committee have power to send for persons, papers and records.

Ordered,
That three be the Quorum of the Committee.

Ordered,
That Mrs. Ann Clwyd, Mr. Terry Davis, Sir Anthony Grant, Mr. Patrick McNair-Wilson, Mr. Albert McQuarrie, Mr. Roger Moate and Sir John Stradling Thomas be members of the Committee.—[Mr. Neubert.]

Speech Therapy

Motion made, and Question proposed, That this House do now adjourn.—[Mr. Neubert.]

Mr. David Alton: May I first thank you, Mr. Deputy Speaker, for this opportunity to raise, on the Adjournment of the House, the provision of speech therapy and the remuneration of speech therapists in the Greater Liverpool area.
My interest in the provision of services for people with special needs stems from the six years that I spent before coming to this House as a teacher of children with special needs. I also spent eight years as a member of Liverpool education authority—much of that time as a member of the personal services sub-committee. More recently I spent a fascinating afternoon at the Myrtle Street hospital where the Liverpool speech therapy department is based. The Minister, whom I welcome to the Dispatch Box tonight, will recall that the unit is situated in a hospital just a stone's throw from the building which once housed the Liverpool Institute for Girls, the school where she herself was educated.
During my visit to the speech therapy unit I met Sheila Wilson, Pauline Furness, Susan Rees and Margaret Bishop, four members of the Liverpool speech therapy team. I was immensely impressed by their work, dedication and commitment. I specifically suggested to them that they might write to the Minister and invite her back to Liverpool to see for herself the work that is undertaken there. Perhaps tonight she can give that undertaking. I am also glad to see the hon. Member for Birkenhead (Mr. Field) in his place; he has entered the Chamber on cue. I know that he will be hoping to catch your eye, Mr. Deputy Speaker, later in the debate to reinforce the arguments for improving speech therapy provision in Merseyside. Although he cannot be here tonight, I know that the hon. Member for Crosby (Mr. Thornton) also wishes to he associated with the arguments being put before the House.
Those arguments might best be summarised in the following way.
First, there is a national under-provision of speech therapy services. Those arguments are highlighted in the words of early-day motion 361 standing in the name of my hon. Friend the Member for Cambridgeshire, North-East (Mr. Freud) and now signed by over 50 Members from all parts of the House. It states:
That this House is gravely concerned about the wholly inadequate level of provision of speech therapists for specifically speech and language impaired children and young people; notes that the resources of the service have failed to keep pace with the increasing demands of an estimated three million of the United Kingdom population; and calls upon Her Majesty's Government to take urgent steps to ameliorate the situation.

Mr. Michael Meadowcroft: Although this Adjournment debate is specifically about Merseyside, the early-day motion refers to the national position. Is my hon. Friend aware that in Leeds people are being transported across the city, often in delicate circumstances, because of the shortage of speech therapists? Parents are anxious that their children are not transported great distances to receive the special attention that they deserve. Is that also the case in Merseyside?

Mr. Alton: My hon. Friend makes a good point about the overall provision for speech therapy throughout the


country. I am glad to see that my hon. Friend the Member for Cambridgeshire, North-East, who tabled the early-day motion, is now in his place.
Apart from the debate on under-provision, there is an argument whether speech therapy is a service provided by the Health Service or the education service. The case of the Oxfordshire parent who recently lost her bid to force the local education authority to provide the speech therapy that her son had been shown to need eloquently demonstrates that the Education Act 1981 is a toothless wonder. That Act offers pious statements and ambitious hopes rather than the services that special needs groups require. The special twist in that case was that the severely speech disordered nine-year-old in question was assessed as requiring therapy that could be provided only by the local health authority—but that statement was binding only on the education authority. It is a classic demarcation dispute, and without the powerful statutory rights that parents enjoy in countries such as the United States, it leaves the needy without any clearly defined rights or services.
Inadequate remuneration might be added to the list as the third argument that Merseyside speech therapists and others throughout the country would wish me to raise with the Minister tonight. Speech therapists are highly skilled and highly motivated, but poorly paid. A graduate entrant can expect to earn £6,096 a year. At the top of the speech therapy tree, a district speech therapist will not earn a great deal more than £13,000. A clinical therapist can work for 30 years, gaining a vast amount of experience, and still expect to earn only a little over £8,000. There is no serious career grade for clinical therapists, nor does the career structure of the profession reflect the degree of responsibility held by staff in their work.
The recent 6 per cent. pay rise was described in the editorial of Therapy Weekly as "simply an insult". A good illustration of the position of therapists is highlighted in an advertisement in this morning's Guardian for a senior administrative secretary at a salary of between £11,371 and £16,136—more than double that which a graduate entrant to the speech therapy service could expect to earn.
Perhaps this is not the correct time and place to try to negotiate a pay increase for speech therapists—yet it is one of the chief reasons why morale in the profession is so low. Levels of pay are, of course, an obvious factor in speech therapy provision.
The wastage rate in the profession, as the Quirk report noted, is inordinately high. That is partly because there is a drain to other professions. As Mary Pletts, the coordinator of the speech sciences degree at the National Hospitals College of Speech Sciences, said in a recent letter to Ken Mack, a veteran campaigner:
This year I have heard that one or two of our graduates from a couple of years back have left the profession because of lack of money, career structure etc.—having found that what they have learned on the course has made them highly marketable for other professions…Unless things really improve for us in the profession I fear this small trickle could become a steady stream.
The shortage of speech therapists and its effect on provision of the service can easily be illustrated by reference to figures from the Mersey health region. I hope that the Minister will seriously ponder these figures. Perhaps tonight she will be able to offer some advice to speech therapists in the Mersey region as to how they can

cope with their increasingly burdensome work load. She may even be able to suggest ways in which recruitment can be improved.
In 1972, the Quirk report recommended that there should be six full-time speech therapists per 100,000 of the population. Speech therapists know that that is a serious under-estimate. The Under-Secretary of State and her predecessor admitted as much last year. Information pooled from throughout the United Kingdom shows that a ratio of 10 speech therapists per 100,000 is much closer to the mark. In 1972, Quirk also estimated that there were 325,000 communication-impaired people in the United Kingdom.
We know also from the report by Enderby and Philipp in 1976 that the figure is, at a conservative estimate, probably 2·3 million. It is estimated in one early-day motion to be some 3 million. The Enderby and Philipp report broke that down into 1·5 million people with noticeable speech and language difficulties and 800,000 people with severe communication disorders.
The average number of speech therapists per 100,000 of the population in the United Kingdom stands at 5·7 whole-time equivalents. The best ratios are in Scotland at 7: 100,000, in Northern Ireland at 6·6:100,000, South East Thames at 6·6: 100,000 and North West Thames at 6·4: 100,000. The lowest ratios are in the following regions: Wessex at 4·4: 100,000, Mersey at 4·7:100,000 and Yorkshire at 4·7:100,000. That is one league where Merseyside certainly comes bottom.
Within the health authorities that comprise the Mersey region, a similar picture emerges. Under-establishment in Liverpool—part of the Mersey region—is 45·6 per cent., in the Wirral—no doubt the hon. Member for Birkenhead will touch on that—60·4 per cent., Crewe 45·7 per cent., Chester 63·6 per cent., Halton 58·6 per cent., Macclesfield 56·4 per cent., St. Helens and Knowsley 34 per cent., Southport and Formby—the North Sefton area—59·3 per cent., South Sefton 60·6 per cent. and Warrington 55·6 per cent.
The South Sefton health authority has two speech therapist posts filled. Five have been vacant since April, and the position could worsen soon. One of the two speech therapists is to leave at the end of this year. The authority is trying to recruit, but to no avail. The post is not a very attractive prospect. There is a small establishment with poor career prospects. New therapists would have to work in complete isolation with an extremely high work load. New therapists would not have the opportunity to benefit from working with fellow professionals more experienced than themselves, nor would they have the time to keep up the academic side of their work. Surely the Minister can see the depressing effect that working in such circumstances would quickly have.
Merseyside speech therapists told me during my meeting with them how truly demoralised they feel about the way in which the Government have responded to their plight. They are simply not well-meaning elocutionists, dressed up in white coats. They are part of a highly qualified graduate profession that, sadly, has a status usually accorded a Cinderella.
I should not like to leave the House with the impression that all the pressure is coming from the therapists. Liverool alone needs another 40 therapists and could use 15 more tomorrow. The failure to provide these posts leaves parents and clients frustrated and angry. I know that they have been writing to the Secretary of State in


their hundreds. I shall quote briefly from three letters. I know some of the parents well. Some are constituents and others are people whose children I worked with when I worked with children who have special needs.
A parent from the Walton area said:
I am a parent of a handicapped child who is three and a half years old. Since he's been coming for speech therapy, John has learnt to play and how to talk. He doesn't have temper tantrums now he can talk. We had to wait 5 months for an appointment. This was a long time. We were worried about John. It would have been more helpful if he could have been seen earlier.
A lady from Tue Brook said:
I am the mother of a six year old child. Thanks to the expertise and dedication of our speech therapists my daughter was helped to develop from a sad, non-communicative introverted child to a happy, fluent and extremely chatty member of our family. Without their help this transformation could not have taken place. Their value must be appreciated financially or there will be no prospects for other such afflicted children.
I should also like to quote from a letter sent to the Secretary of State by someone in Childwall, who said:
I waited 5 months for an appointment to see a speech therapist. I have been feeling helpless at not being able to communicate with my own son. After seeing a speech therapist it only took 6 months to have him talking correctly but 5 months were wasted at the beginning.
It is a brave person who would question the value of adequately providing for a service that can turn a sad, non-communicative, introverted child into a happy and confident youngster.
There is an urgent need to improve provision, remuneration and definition of clear lines of responsibility. There is a desperate need to boost morale and to produce more than the usual expressions of gratitude to speech therapists for the work that they do. The situation, as I have tried to demonstrate, is especially bad on Merseyside and I hope that tonight's debate will go a little way to convince the Government of the need to take urgent steps to improve matters.

Mr. Frank Field: I am grateful to the hon. Member for Liverpool, Mossley Hill (Mr. Alton) for allowing me to participate in the debate. As it is the first time that I have faced the Minister across the Dispatch Box I should say how pleased I am to see her there. Like the Minister herself, I am one of her fans. I am slightly worried however, because one of the reasons why I am a fan is that I believe that she has the fight to control, as anyone can control, the Civil Service. Therefore, I am slightly alarmed that she has only one minder tonight. I hope that that is not a sign that the Civil Service thinks that it is getting on top of the Minister. The Opposition will judge how effectively she controls her Department by the way in which she responds to tonight's debate, not necessarily in what she says tonight but in the follow-up.
The case has been eloquently put by the hon. Member for Mossley Hill. He has made the case for the under-establishment of speech therapists. That is clearly linked to their low pay. We have a Government who say that it is wrong to strike, bully patients or rough up the public, and many of us, in normal circumstances, would agree with that. However, there is another part to that argument. If any of us put forward those views, we have a duty placed on us to ensure that those who do have a genuine grievance can have that grievance met in a civilised way. I do not

believe that the Government are facing up to that issue. Under-establishment and low pay are particular grievances of speech therapists but there are general conclusions to be drawn from this case as to how we settle unfairnesses in pay in our society.
I want to bring a message from some of my constituents who have benefited from the speech therapists. I must confess if I had not been lobbied I would not have been as well briefed about their work as I am. They came to my surgery and quietly put forward their case. They asked me to visit their surgery when I was next at the Arrowe Park hospital. I made a special visit. My constituents said that the speech therapists give them a passport back to life. We want to know from the Minister whether that passport will be spread to many more of our constituents and whether it will be spread by mere nice sounding phrases from the Minister or whether she has some effective action up her sleeve that may annoy some people in the official Box and beyond.

The Parliamentary Under-Secretary of State for Health and Social Security (Mrs. Edwina Currie): I first congratulate the hon. Member for Liverpool, Mossley Hill (Mr. Alton) on his sucess in the ballot and on raising this important topic. I also thank the hon. Member for Birkenhead (Mr. Field) for his kind remarks. I have always thought that the best comment made about the hon. Member for Birkenhead was that he is the only real Tory that the Labour party has ever had.
I had the privilege of learning about speech therapy some years ago when I was involved in the Health Service in Birmingham. I had the opportunity to spend a whole day with speech therapists in that city working in hospitals and the community. I entirely agree with the hon. Member for Mossley Hill. The range of their work is astonishing. They work not only with child stammers and stutters, but with children with a range of psychological and physical disabilities. Their work with adults has grown dramatically in recent years—not only with adults suffering from strokes or head injuries following accidents, but also involving people with laryngectomies. Speech therapists perform miraculous work to enable people without voice boxes to speak again.
I must stress that health authorities have recognised the important and increasing role of speech therapists in helping patients of all ages and all kinds to overcome speech impairment. The result of that recognition is that speech therapy has expanded very quickly, at a greater average rate than the general average rate of increase in Health Service expenditure. I mean not merely to say that but to prove it.
Expenditure on the Health Service since 1974 has increased nearly threefold. Expenditure on speech therapy has increased nearly ninefold in that period. In 1974–75 £2·9 million was spent on speech therapy. The 1985–86 figure—already a year out of date—was £24.7 million. As a result, it is possible to understand that the expenditure on speech therapy has grown very quickly. The results are reflected in the number of speech therapists employed in the service. In 1973 there were 1,461 whole-time equivalent speech therapists employed in the Health Service in Great Britain. By 1979, that figure had risen to 1,870. By 1985, there were 2,790. The rate of growth between 1979 and 1985 was 49 per cent. That is a


tremendous hike in the number of people employed in the service. In England, the increase between 1979 and 1985 was even greater at 55 per cent.
Many of the concerns expressed by the hon. Member for Mossley Hill and the hon. Member for Birkenhead have been taken on board by local authorities. I venture to suggest very gently that, whatever difficulties the service may be experiencing now, they must have been much worse when there were fewer speech therapists under the control of a Government of a different political colour.
The question has been raised as to whether speech therapy is education or health. As I have said, for some years speech therapists have been employed by the Health Service. The Wallace case has tested that to some extent, but I understand that that is up for appeal, so we may receive further information on that point. It is a long time since speech therapists were employed en masse in the education service. Given the increased importance of the adult therapy that they provide, it is appropriate that they should be in the Health Service. The bulk of patients and the greatest need will come from that area.
One of the problems that is often raised is why they are not treated in the same way as such professions as physiotherapy, occupational therapy and others. The reasons for that are historical. I understand that speech therapists have always felt that they were a separate profession and they were concerned about losing their independence. They have always claimed that they are capable of independent diagnosis and the delivery of treatment. Therefore, they do not have to take referrals from doctors. As a simple matter of fact, the vast majority of referrals come from a doctor or another therapist if the case is referred back to a doctor for medical advice. However, that is the view taken by the speech therapists. As a result, they excluded themselves from the Professions Supplementary to Medicine Act 1960, and therefore speech therapy is not a registered profession under that Act. Until 1982 however, they were included with the other professions in the professional and technical A Whitley council for pay purposes. In 1983, the pay review body for nursing staff, midwives, health visitors and professions allied to medicine was set up. Speech therapists were again invited to take part but again refused to do so. While most speech therapists said that they were not opposed to the principle of a review body, they did not want to be linked with the other professional groups with whom they felt that they had little in common.
That was the crucial decision. I understand that some speech therapists now regret it, but that is the situation as it stands. Representatives of speech therapists negotiate with the management side of the Scientific and Professional Staffs Council, which is an ad hoc arrangement, until the trade union side can agree on the formation of a new council.
In 1985, speech therapists made a formal claim for pay parity with other graduate professions, and eventually received the same percentage increase as other staff groups, but the management side agreed to examine jointly with the staff side the arguments which bore on the graduate element of their claim. That claim is, as hon. Members know, still under way.
There is one point about the comparison with graduate professions elsewhere. Speech therapy had for many years been a graduate entry profession, but not all speech

therapists are graduates. For historical reasons, speech therapists work 33 hours a week, whereas pharmacists, for example work 39 hours a week and psychologists' hours are unconditional. These elements have to be taken into account in the discussions.

Mr. Archy Kirkwood: How many hours a week do Ministers work?

Mrs. Currie: More than 33.

Mr. Field: Not all of them do.

Mrs. Currie: I understand that the figures that hon. Members have quoted for pay are accurate, but it is possible to go up to £15,000 a year and, at my estimation, there are only six people at the moment in the basic scale, which would probably give somebody less than £7,000. It remains true, however, that the largest single group of speech therapists are in the senior II grade which, at the moment, gives a salary with a minimum of £7,368 and a maximum of £8,676. I therefore do not dispute the sort of figures that are being offered.
As for Merseyside, I have taken the opportunity today to discuss some of these questions with the chairman of the regional health authority, Sir Don Wilson. I am sure that hon. Members will join me in sending our warm congratulations on the award of his much deserved knighthood in the new year honours list.
I think that hon. Members will agree that it has been the case for many years now that the level of service is a matter for individual health authorities, which must decide how to use their resources in a way which best serves the needs of their populations, That is what decentralisation is all about. Hon. Members are a little unfair in the way in which they use their figures because, whatever may be happening in a snapshot taken at the moment, recently Mersey has been doing rather better. The overall plans in the Mersey regional health authority, some of which have already been carried out, show very substantial improvements. The drift of the argument advanced by the hon. Member for Mossley Hill is accepted in Mersey. It simply cannot be done overnight. A substantial amount is already being done.
I have here figures of staff in post full-time equivalents between June 1985 and September 1986, which are the most recent figures. As a simple matter of fact, between those two points in time, the total number of speech therapists employed in Mersey went up from 96·3 whole-time equivalents to 101·7 whole-time equivalents. That is an increase of five and half whole-time bodies in 18 months, which is a substantial improvement and is against a planned establishment of 110·5. That gap of rather less than 9 per cent. would match almost any level of vacancies anywhere else in the service. It is certainly not the enormous gap that was being described.
In the Liverpool health authority, which covers the constituency of the hon. Member for Mossley Hill, the number of speech therapists has risen from 16 to 18 in post, which is a rise of two whole-time equivalents. If we go through the figures for the other health authorities we find that, from June 1985 to September 1986, Chester, Crewe and Halton have stayed roughly the same, Macclesfield's staff in post has doubled, Warrington has increased, St. Helens and Knowsley has stayed roughly the same, Southport and Formby has also nearly doubled and Wirral is up. The only one that has shown a sharp drop is South Sefton.
It is worth remembering that the figures for South Sefton should he looked at jointly with Liverpool, as the latter provides speech therapy services for children at Fazackerly and Walton hospitals, which are the administrative responsibility of South Sefton. Two of those districts, Warrington and St. Helens, offer provisions for their populations that are substantially above the national average. Two—Crewe and Macclesfield—are very close to achieving that level of provision. South Sefton alone is well down on the level of provision and that is substantially for the reasons that I have mentioned. Only four out of the 11 districts showed vacancies in September 1986. That is not a bad record.
The chairman of the regional health authority has pointed out to me that, in March 1984, there were only 77 whole-time equivalent speech therapists in the region and now there are 110 funded and 102 in post. The numbers have risen from 77 to 102 in a matter of two and a half years and that is a remarkable increase. By 1994 the plan is for staff numbers to increase to 150. That is not only a remarkable achievement in terms of what the authority has already done, but shows that it has taken matters in hand.

Mr. Alton: I am grateful to the Minister for giving way and also for the reply that she is giving. Obviously she is satisfied with the arguments that she is putting forward and, at the risk of accusing her of some complacency, I ask whether she would be prepared to take me up on my earlier invitation to come up and explain the situation to the therapists?

Mrs. Currie: I am always interested to visit my home town, especially as the hon. Gentleman is my mother's Member of Parliament.

Mr. Alton: I am sure that she voted for me.

Mrs. Currie: I shall bear that invitation in mind.
I asked the chairman of the regional health authority exactly what the authority proposed to do to ensure that it continued recruiting at the same rate as it has done. I should be grateful if hon. Members would recognise what the authority has already done.
The authority is considering the introduction of a supply register, effectively a bank of speech therapists, to cover temporary absences, including maternity leave. In this profession, as in any profession that employs a substantially large number of young women, such leave is a problem.
The regional authority is considering supporting a number of training places at Manchester polytechnic through the sponsorship of degree level students. The districts already co-operate with the polytechnic in providing training placements for the training school's three-year ordinary and four-year honours degree courses in speech therapy.
Speech therapy is an item on the agenda at the district health authorities chairmen's meeting on 22 January. They meet regularly and I am sure that that item has nothing to do with this Adjournment debate. South, Sefton, which is the authority with particular problems, is in active discussion with the regional health authority about how to overcome those problems. It is not satisfied that it has fully explored the possibilities through advertising and adopting a more flexible approach to posts. I am sure that those approaches will be valuable. I look forward to witnessing further improvements and I hope that the hon. Member for Mossley Hill will call another Adjournment debate in 1994 to congratulate the health authorities on what they have done.
We consider that speech therapists are most important. Their excellent work is well known and the results are spectacular. Pay is under consideration. The alarm raised about the Mersey regional health authority is a little bit exaggerated. It has done very well so far and if it is to achieve further growth it will need to be imaginative in its recruitment and training. We must all hope that discussions of those matters will come to a successful conclusion.

The Question having been proposed after Ten o'clock on Monday evening and the debate having continued for half an hour, MR. DEPUTY SPEAKER adjourned the House without Question put, pursuant to the Standing Order.

Adjourned accordingly at twelve minutes past Twelve o'clock.